President Bush's decision to go ahead with the $7 billion FSX fighter deal sets the stage for a heated congressional debate over U.S.-Japanese defense ties, trade friction and America's high-technology future.

In announcing the agreement for joint development and production of an advanced version of the F-16 fighter, Bush sought to allay concerns voiced on Capitol Hill - as well as within his own administration - over the economic and technological impact of the deal.Bush told reporters Friday that the United States will have a 40 percent share in the development work and a "similar share" of the production run for the 130 planes which Japan wants to deploy in the late 1990s.

Addressing technology issues, the president said that "sensitive source codes for the aircraft's computer will be strictly controlled. Access will be granted to only those codes that are essential to complete the project."

Bush said he was convinced that the agreement "is in the strategic and commercial interests of the United States."

However, several members of Congress said they were still dissatisfied with the terms of the deal and would strive to block it when the agreement is sent up to Capitol Hill for a 30-day review period.

Congress could try to halt the deal by passing a joint resolution of disapproval, but a two-thirds majority of both houses would be required to override a likely Bush veto of such a resolution.

Rep. Richard A. Gephardt, D-Mo., chairman of the House FSX Task Force, declared that "I will lead an effort to ensure that this giveaway of American technology never sees the light of day."

"Once again, the administration has allowed political and foreign policy factors to dominate a decision having a fundamental impact on our economic future," said Gephardt, who last year ran for president on a trade protectionism platform.

Gephardt's St. Louis district is the home of General Dynamics, which is slated to work with Japan's Mitsubishi Heavy Industries in co-developing and co-producing the FSX.

The Missouri Democrat and other critics of the deal contend that Japan instead should buy American-made F-16s "off the shelf" to help ease this country's $55 billion trade deficit with Japan.

The FSX announcement came the same day as the Office of the Trade Representative released a study listing Japan as one of the worst users of trade barriers. According to published reports, the agency recommended sanctions for refusing to open its markets to U.S.-made cellular phones and mobiles radios.

Proponents of the FSX have argued that the deal will give U.S. industry access to valuable technology - particularly in the areas of composite wing construction and advanced radar systems - developed by the Japanese.

However, a congressional source said a classified report sent to Capitol Hill Friday by the General Accounting Office, an investigative arm of Congress, indicates that the United States actually may gain little or nothing from such Japanese technology.

"We don't know ... as to what advanced technologies they (the Japanese) might have. So it's pure guesswork. From what they've been able to estimate from open-source stuff, the U.S. is far advanced in wing composites and is even further advanced in the radar technology," said the source, who spoke on condition he not be identified.

The source said GAO officials also were expected to testify at hearings.