WASHINGTON (Reuters) - The Pentagon said on Friday it has finalized a contract worth $4 billion with Lockheed Martin Corp <LMT.N> to supply equipment for a missile defense system to the United States and the United Arab Emirates.

The deal involves Lockheed's Terminal High Altitude Area Defense (THAAD) missile defense system that is designed to intercept ballistic missiles in midair.

The contract reflects growing confidence and demand for the missile defense system, said Riki Ellison, founder of the non-profit Missile Defense Advocacy Alliance.

The deal, which has been in negotiation for several years, will combine orders for the United States and UAE, generating savings for the United States of about 10 percent, said Mat Joyce, Lockheed program manager for THAAD.

The United States is in talks with Qatar on a similar sale.

Saudi Arabia, Japan and South Korea have also expressed interest, Joyce said.

(Reporting by Patrick Rucker and Andrea Shala-Esa; Editing by Eric Beech)