During 1974, production of the Nesher was phased out in favour of a more advanced Mirage derivative which had been planned in parallel to the Nesher, known as the IAI Kfir. The IAF retired the type during the 1970s. The aircraft were later sold to the Argentine Air Force, where they were operated under the name Dagger. During 1978, Argentina urgently deployed their first Daggers due to the Beagle conflict, a territorial dispute and war scare between Argentina and neighbouring Chile. Daggers were also used during the 1982 Falklands War between Argentina and the United Kingdom, conducting a total of 153 sorties against both ground and naval targets across the 45 days of combat operations. During their anti-ship attacks, they were reportedly responsible for damaging several vessels, including , , , , and . In total, 11 Daggers were lost in combat with the British. The remaining aircraft were later upgraded into the Finger standard.