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Brazil Air Force prefers Swedish jets-report

BRASILIA, Jan 5 (Reuters) - The Brazilian Air Force would prefer to buy its next-generation fighter jets from Sweden, putting it at odds with President Luiz Inacio Lula da Silva’s preference for French planes, media reported on Tuesday.

The deal, which could initially be worth more than $4 billion, has sparked fierce competition among aircraft manufacturers.

An Air Force report presented to Defense Minister Nelson Jobim said Sweden's Saab SAABb.ST had presented the best overall project among the three finalists, Folha de Sao Paulo newspaper reported on Tuesday.

The U.S.-made Boeing BA.N F18 was runner-up in the report, and France's Dassault Aviation AVMD.PA placed last with its Rafale jet.

The Brazilian government said last year that it was in the final stages of talks to acquire the Rafale.

Accused by critics of cutting short the bidding process, the government insisted no final decision had been made. Lula said he would have the final word and that his decision would be political and strategic.

Brazil has signed a strategic defense agreement with France worth billions of dollars, including the local assembly of helicopters and conventional and nuclear-powered submarines.

Brazil is seeking a generous technology transfer offer and local assembly as part of a contract to buy 36 jet fighters. The deal could eventually rise to more than 100 aircraft.

Saab’s Gripen NG jet had a lower purchase and maintenance cost and would allow for more technology to be transferred to Brazil, Folha cited the Air Force report as saying.

Unlike the Rafale, which is a finished product, the Gripen NG would be developed with Brazilian participation, the Air Force said according to Folha.

The Veja news magazine reported this week that Jobim told friends there might not be a decision on the deal before he steps down in April to run for public office in October general elections.

For more than a decade, Brazil has been studying how to replace its aging fleet of fighter jets.

The Air Force declined to comment, and the defense ministry was not immediately available to comment. (Reporting by Raymond Colitt; Editing by Lisa Von Ahn)