By Nadia Saleem

DUBAI (Reuters) - The United Arab Emirates (UAE) has bought two Bombardier Global 6000 jets with surveillance equipment from Sweden's SAAB <SAABb.ST> in a deal worth $1.27 billion, a defense ministry official said on Monday.

Major General Abdullah al-Hashimi, the ministry's executive director of strategic analysis, said UAE was also in talks about upgrading the radar systems of two older SAAB turboprop planes and would decide whether to proceed within two years.

"The two radars will be close and similar to each other," Hashimi said at the Dubai Airshow, referring to the new system and the planned systems upgrade of its two Saab 340s, a twin-engine turboprop aircraft.

Saab will deliver the new airborne surveillance system based on "Saab Erieye", which is a high-performance, long-range airborne early warning and control radar system.

It will use Canadian planemaker Bombardier's <BBDb.TO> Global 6000, a long-range and large cabin business jet.

Hakan Buskhe, president and chief executive of SAAB, said the company was "heavily invested" in the Middle East.

"Surveillance overall is extremely important here, the market potential is huge," he said at the Airshow.

Buskhe declined to comment on whether SAAB had seen any impact on demand from increased conflict in the Gulf or falling oil prices.

"We try to be extremely affordable, but can't speculate on impact from oil prices," he said.

Conflicts in Iraq, Syria and Yemen have increased demand for surveillance and for border security. Weapon makers are looking for opportunities to meet that demand by equipping manned and unmanned sensors for security and surveillance.

(Reporting by Nadia Saleem; editing by David Clarke)