*

France shuts 4 Israeli stands for displaying offensive

weapons

*

Israel condemns move as 'outrageous and unprecedented'

*

Airbus bags order from Saudi Arabia's AviLease

*

Boeing ( BA ) CEO stays away to focus on Air India crash probe

(Combines air show stories)

By Giulia Segreti, Paul Sandle and Tim Hepher

PARIS, June 16 (Reuters) - Airbus bagged a $3.5

billion plane order from Saudi Arabia's AviLease on the opening

day of the Paris Airshow on Monday, as a diplomatic dispute

erupted over France's decision to shut down four Israeli stands

for displaying deadly weapons.

Delegates expect this year's iteration of the world's

biggest aviation trade show to see less business than usual,

partly due to last week's deadly crash of an Air India Boeing

787 and also because Boeing ( BA ) racked up huge deals during

U.S. President Donald Trump's recent tour of the Middle East.

But Airbus looks set to close a series of sales on its home

turf, and interest in the defence side of the show is high as

Europe ramps up military spending and conflict between Israel

and Iran escalates.

Tensions between long-standing allies France and Israel

flared up as the show was getting underway, when Paris ordered

the main four Israeli company stands to be closed down when they

refused to remove offensive weapons from display.

Israel's ministry of defence condemned the move as

"outrageous and unprecedented" and accused France of trying to

shield its companies from Israeli competition.

The show organisers said they were holding talks to try to

"find a favourable outcome to the situation".

Boeing's ( BA ) CEO Kelly Ortberg and Commercial Airplanes boss

Stephanie Pope have cancelled their trip to Paris and the U.S.

company is scaling back its schedule at the event as it focuses

on supporting the probe into last week's Air India crash that

killed more than 240 people and was the first for its 787 model.

Another Air India Boeing 787 bound for New Delhi returned to

its origin of Hong Kong as a precautionary measure on Monday

after a technical issue was suspected mid-air.

But Airbus was busy at the show working on deals.

Saudi leasing company AviLease said on Monday it had ordered

30 Airbus A320neo single-aisle jets and 10 A350 freighters in

its first direct deal with the European planemaker.

That would be worth around $3.5 billion, according to

estimated prices from analysts Cirium Ascend. The two companies

did not give a value for the deal, which could increase to 77

jets if AviLease exercises options to buy more of both models.

Two people familiar with the matter also told Reuters that

Polish airline LOT was poised to announce an order for 40 Airbus

A220 plus options for a further 44 aircraft.

Brazil's Embraer ( ERJ ) had pushed hard for that deal,

sources said. None of the parties agreed to comment.

Airbus is also the front-runner against the same planemaker

for a potential order for dozens of A220 jets from AirAsia,

sources said.