Citing an aide to French President Nicolas Sarkozy, Defense News reported that Brazil's "preference" for France's pride combat aircraft "is expected to be confirmed soon."

"It's not up for us to say," though, the source said. "It is up to Brazil."

The report surfaced after talks between the French president and Brazil's leader Luiz Inacio Lula da Silva in Madrid on the sidelines of the European Union-Latin America summit.

Sources close to the Brazilian president denied that the expected sale was discussed between the two leaders.

The foreign aerospace giants competing for the sale to Brazil of 36 combat aircraft are France's Dassault with its Rafael fighter, Sweden's Saab with the Gripen NG aircraft and U.S. company Boeing with the F/A-18 Super Hornet.

By some accounts, the contract for the initial 36 planes could rise to more than 120.

The deal is estimated to be worth between $4 and $7 billion, depending on details of the order to be agreed, defense experts have said.

The aircraft are expected to renew Brazil's aging fleet of combat aircraft. It has long been suggested that France's Rafael fighter stands as the preferred pick of the Latin American country.

The talks in Madrid were seen as a last-ditch bid by France to seal the deal with Brazil as upcoming elections in the Latin American country threatened to spoil the deal.

France has already suffered sales setbacks in Morocco and Asia, while fears have mounted in Paris that ongoing talks over Brazil's tender could be stalled ahead of the scheduled elections.

Despite months of talks, Brazil has yet to narrow down a field of three bidders.

"Every week bringing us closer to the election is worrying," said a French source familiar with the negotiations.

All the contenders have met technical specifications and relevant reports have been delivered to Brazil's defense ministry.

What makes the French bid attractive, experts say, is France's sweetener of transferring all technology related to the supersonic Rafael so that Brazil, bent on becoming the lead military power in South America, could assemble most of the jets itself and sell them regionally.

Brazil has already signed a deal with the French for the construction of five submarines in Brazil. The deal also includes building a nuclear-powered vessel.

Should the deal succeed with Brazil, it will mark Rafale's first export order.

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