Poland announced Friday it has chosen U.S. F-16 jet fighters to modernize its air force to NATO standards in a contract worth some US$3.5 billion, three years after the former Soviet bloc nation joined the western alliance.

Lockheed-Martin beat out rival bids by two European makers with a U.S. government-backed offer to supply 48 of the planes, weapons, pilot training and investment in Poland to help offset the cost.

"This is an optimum solution for the military security of the state and it meets our obligation as an ally," Defense Minister Jerzy Szmajdzinski told a news conference after making the announcement.

The Gripen jet, made by Sweden's Saab and Britain's BAE Systems, was considered the F-16's chief rival - in part because it was cheaper and would have made a considerable difference for Poland's strapped budget. The French-made Mirage 2000 was also in the running.

The chairman of Dassault Aviation, which makes the Mirage, claimed that Poland chose politics over performance and price.

"The political element was the chief element, well beyond the quality or the price," Charles Edelstenne told French radio station France-Info on Thursday, even before the official announcement.

Friday's announcement capped nearly a decade of debate in Poland about how to modernize its military, which gained pace after the country joined NATO despite Russian protests in 1999.

In the final phase, a government commission reviewed the bids in detail starting Nov. 13, weighing price, aircraft features, financial terms and offers of contracts to Polish companies. Szmajdzinski said the U.S. bid was "optimal for the economy, including the weapons industry" because of the investment and job creation it promised.

Washington padded Lockheed Martin's F-16 bid with the offer of a US$3.8 billion loan to Poland with a repayment term of up to 15 years, approved by the U.S. Congress in October. U.S. officials have argued their financial plan is flexible and will depend on Poland's payment ability.

Offering the most advanced fighter is also seen as U.S. recognition for Poland's role in eastern Europe, and choosing the F-16 could also give Polish Air Force a strong position among the NATO allies.

Poland needs 48 fighter jets by 2008 to replace its Soviet-built MiGs and bring the country's military up to NATO standards. The first 16 planes are to arrive in 2006, the remaining 32 within the next two years.

Poland is the largest of the three former Soviet bloc countries that joined NATO in 1999. The other two countries, Hungary and the Czech Republic, opted for Gripens, but the Czechs canceled their order to free up reconstruction aid after devastating floods hit the capital Prague last summer.

With acknowledgement to Andrzej Stylinski, Sapa-AP and BC-Poland-Fighter-Jets Warsaw.