UPDATE 4-Norway picks U.S. combat jet over Swedish rival

* Deal for 48 planes worth around $2.54 bln

* Chose Lockheed Martin's F-35 Joint Strike Fighter

* Rejected Saab's Gripen

* Deal biggest defence investment in Norway's history

* Lockheed stock up 1.2 pct, Saab closes down 12 pct

(Adds details, comments from news conference)

By Aasa Christine Stoltz and John Acher

OSLO, Nov 20 (Reuters) - Norway will buy 48 of Lockheed Martin's (LMT.N) F-35 Joint Strike Fighters, in a deal worth about $2.54 billion, instead of Swedish Saab's (SAABb.ST) Gripen to replace its ageing F-16 warplanes.

The deal is the biggest defence investment in NATO member Norway's history, and the government said that total costs over the lifetime of the aircraft are estimated at 145 billion Norwegian crowns ($20.43 billion).

Norway says that it needs new-generation jets partly to monitor its large northern seaboard, where Russia has boosted military activities in recent years.

"Combat aircraft is a crucial capability for Norway's defence," Prime Minister Jens Stoltenberg said in a statement on Thursday.

"The Joint Strike Fighter is clearly best at fulfilling the requirements we have set, and in addition (it) is the cheapest plane," Stoltenberg told a news conference.

Norway said the U.S. planes would cost 18 billion Norwegian crowns ($2.54 billion), which it said was 6 billion crowns cheaper than the Gripens. Defence officials said that stealth technology was one feature that put the F-35 ahead of others.

The defence ministry said total costs of owning the Gripen plane over a 30-year lifetime were estimated at 20-30 billion crowns higher than the JSF lifetime costs.

Norway has participated in the development of the JSF with other NATO allies, while also running a competitive tender where the Gripen has been the only other jet considered, after the Eurofighter dropped out of the competition.