UPDATE 2-France, UAE still talking on Rafale jets -French source
* Talks have chance of succeeding -source
* Contract will not be signed during Hollande visit -source
PARIS Jan 9 (Reuters) - France is hopeful of selling 60 Rafale fighter jets to the United Arab Emirates, a French diplomatic source said on Thursday as President Francois Hollande prepares to visit the Gulf country next week.
The possible sale will be one of the main focuses of Hollande's visit although the source said the signature of a deal was not planned during the trip.
The on-off negotiations have been under way for several years and were given high-profile support by former French president Nicolas Sarkozy, who mounted a diplomatic campaign to win the first firm export order for the jet.
Talks hit an obstacle in November 2010 when Abu Dhabi publicly criticized Dassault Aviation, the maker of the Rafale, over the price of the multi-role combat jet and sought information on the competing Eurofighter Typhoon.
It has also contacted U.S. company Boeing over the F-18 warplane.
"The matter is still on the table and has a chance of succeeding and it is also linked with other Rafale export deals to other countries," the source said.
Dassault declined to comment.
The negotiations were reported to have been put on hold ahead of last May's French elections, and since then the oil producing nation has appeared less hurried to close a deal as it gauges Hollande's diplomatic engagement.
He travels to Abu Dhabi on Jan. 14-15, where Paris has its only military base in the Middle East, to discuss bilateral relations and rising tensions with Iran over its nuclear programme.
"If the question is: Will the contract be signed during the president's visit, then the answer is no," the source said.
A French win in the UAE could also lead to further contracts in the Gulf Arab region, which shares the West's concerns that Iran is using its nuclear energy programme to develop weapons, a charge Tehran has denied. Saudi Arabia inked a deal for U.S. arms worth nearly $60 billion a year ago.
Qatar, a close French ally, said last year it wanted to replace its fleet of Mirage fighter jets during 2012, possibly buying 24 to 36 units. Kuwait in 2010 said it was also considering buying Rafales to replace its ageing Mirage fleet.
According to analysts, the Gulf countries are looking to have the same aircraft for interoperability reasons as well as differentiating themselves from Gulf power house Saudi Arabia, which uses U.S. Boeing-built F-15s.
Paris has billed Hollande's visit as more than just a push for France's commercial interests in the country even though he is bringing a delegation of executives from at least 10 top French companies.