Russia has agreed to deliver S-300 anti-aircraft missile systems worth $300 million to Azerbaijan, Russian newspaper reported on Thursday.

Russian state arms exporter Rosoboronexport signed an agreement with the Azerbaijani Defense Ministry on the supply of two batteries of S-300 anti-aircraft systems, the Vedomosti daily reported, citing Russian arms industry sources.

The report said the S-300 was unlikely to be of much use in any renewed fighting over Karabakh, since Armenia does not possess the kind of modern strike aircraft or missiles that such a sophisticated system would normally be deployed against.

An official at Russian state arms exporter Rosoboronexport declined to comment on the report.

Armenia has traditionally been Russia's chief strategic ally in the South Caucasus, but Moscow has in recent years developed closer ties with Azerbaijan as it vies with the West for influence over oil and gas reserves in the Caspian Sea.

A spokesman for the Azeri Defence Ministry declined to confirm the purchase, saying only: "The Azeri army is strengthening itself, and will continue to strengthen itself."

Russia has put on hold delivery of the same S-300 system to Iran for long.

Citing the Moscow Defence Brief military journal, Vedomosti said the $300 million price tag for the Azeri deal would make it the largest arms purchase by any ex-Soviet state other than Russia.

In Russia's armed forces, an S-300 battery normally consists of four truck-mounted installations, each with four missiles held in metal tubes.

Vedomosti quoted an unidentified Russian military official as saying Azerbaijan had probably purchased the anti-aircraft system to help secure itself against any deterioration in the situation involving neighbouring Iran.

Israel, most experts estimate that it has at least between 100 and 200 nuclear warheads, often threatens the Islamic republic with an attack.

Agencies