WASHINGTON, (AFP) — The Pentagon has awarded US defense giant Lockheed Martin Corp. with a $1.96 billion contract to supply the United Arab Emirates with a missile defense system.

Under the contract, Lockheed will deliver two Terminal High Altitude Area Defense or Thaad systems that include radar, interceptors and launchers, according to a Pentagon statement.

The UAE will also receive 30 years of spare parts, support, and training. The total package is valued at approximately $3.48 billion.

The project is part of President Barack Obama’s plans to build up a regional defense in the Middle East to counter Iran’s growing arsenal of ballistic missiles.

Under the plan, land-based interceptors would be tied in with a detection network on US Navy Aegis-class warships.

“Acquisition of this critical defense system will bolster the UAE’s air and missile defense capability and enhance the already robust ballistic missile defense cooperation between the United States and the UAE,” Pentagon spokesman George Little said in a statement.

UAE is the first country to purchase the expensive Thaad system.

The announcement came amid rising tensions with Iran and a day after the United States confirmed the signing of a $30 billion arms deal to provide another Gulf ally — Saudi Arabia — with 84 new fighter jets.

Little said it was the latest in a string of similar sales, including a $1.7 billion contract to upgrade Saudi Arabia’s Patriot missiles, and the sale of 209 Patriot GEM-T missiles to Kuwait worth around $900 million.