"The agreement sends a signal, internationally, that Sweden is reacting to the security situation in the world, that Sweden is a guarantor for peace and stability in northern Europe and that the defense of Sweden's territory is in focus," Defense Minister Peter Hultqvist told the TT news agency.

Sweden's left-wing minority government, made up of the Social Democrats and the Greens, had announced a 6.2 billion kronor increase over five years on March 12.

But the opposition had rejected that bid, saying it was too little money. Friday's agreement was negotiated together with the conservative Moderates, the Center Party and the Christian Democrats.

The agreed sum is however about 8.0 billion kronor less than what the military had requested.

A large share of the money is to be spent modernizing ships that can detect and intercept submarines, and bringing troops back to the strategically-located Baltic island of Gotland for the first time in 10 years, amid concerns over Russia's military aggression.

Last October, a week-long search for a suspected Russian submarine in waters off Stockholm was called off despite members of the public reporting five sightings of suspicious vessels in a week.

The Swedish military's failure to find what it would only refer to as "a foreign vessel" -- but which was believed by most experts to be Russian -- raised questions over the country's ability to defend itself after years of defense cutbacks in the post-Cold War era.

A series of alleged airspace violations by Russian jets over the last year has also raised jitters in Sweden, which is not a member of NATO. (*****)

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