[Abraham]

Although there are certainly similarities between the F 16 and the Lavi, it still is a completely new all-Israeli design, using some of the F 16 innovative features. If you realise that the F 16 is a mid-wing plane and the Lavi a low-wing plane, you'll appreciate that the fuselage construction is completely different.
The Lavi has capabilities comparable to the F 16C.

The Lavi had a very checkred history, being an Israeli prestige object, funded by US Dollars and intended to be independant of the US aircraft industry (and to compete with the US industry in Latin America!).
The US got fed up with the Israeli attitude (basically demanding a $ 500 M per year grant over the develloping period!) during the years long Lavi negotiations and found that Isreal's security interest was better served by buying cheaper F 16's and ordering 3 submarines in Germany. This was consequently decided.

Obviously Israel found a new possibility to recoup some money out of the failed project.

P.S. I once (I think in 2000) saw the only prototype when I was leaving Ben Gurion airport; painted white, beautifull plane.

For an inside look into this US-Israeli political crisis, read: "Flight of the Lavi" by Dov S. Zakheim (Brassey's Inc. ISBN 1-57488-065-9).