UPDATE 1-Lockheed to supply 18 F-16s to Pakistan

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WASHINGTON, Dec 31 (Reuters) - Lockheed Martin Corp LMT.N> was awarded a $498.2 million contract to supply F-16 aircraft to Pakistan, the U.S. Pentagon said on Monday, as Pakistani officials mulled whether to go ahead with a Jan. 8 election after the assassination of opposition leader Benazir Bhutto.

Lockheed will sell 12 F-16C plus 6 F-16D planes to Pakistan under the contract, the Pentagon said in its daily list of defense contract awards. The U.S. Defense Department, which oversees sales of military weapons to foreign governments, did not say how soon the fighter jets would be delivered.

Pakistan has received about $10 billion in U.S. funding since 2001 because Washington views Pakistan as a key ally in President George W. Bush's campaign against terrorism.

Bhutto's death on Thursday wrecked U.S. hopes of a power-sharing deal between her and President Pervez Musharraf, who took power in a 1999 military coup but left the army last month to become a civilian president.

The United States has agreed to sell Pakistan up to 36 new F-16 jets together with refurbished F-16s.

Last month, two senior Democratic U.S. lawmakers urged the suspension of some U.S. military sales, including the sale of F-16 fighter jets, if Pakistani President Pervez Musharraf did not revoke emergency rule.

Lockheed, the Pentagon's No. 1 contractor, won a $144 million contract in 2006 for materials needed to build the F-16s. (Reporting by Julie Vorman; Editing by Jeffrey Benkoe, Toni Reinhold)