ASUNCION, July 18 (Reuters) - Paraguay is negotiating

with Brazil to buy six Embraer Super Tucano A-29

fighter planes for $96 million as part of its efforts to fight

drug trafficking, Defense Minister Oscar Gonzalez said on

Thursday.

The deal is part of a $500 million package the South

American nation's government is allocating to defense and

security projects, Gonzalez told reporters.

"We're aiming (to close the deal) this year," Gonzalez said,

adding that the agreement, negotiated between the Paraguayan and

Brazilian governments, would be used to face off "new threats"

from drug trafficking and organized crime.

The government had on Thursday issued a decree

authorizing the operation, without a public tender, though

Gonzalez said the process must still be approved in Congress.

Days earlier, nearby Uruguay said it was in "very

advanced" talks to buy six of the same Embraer ( ERJ ) combat planes to

boost its armed forces.