"The S-300 system will be delivered to Iran within the framework of a contract agreed in the past," Iranian Defence Minister Mostafa Mohammad Najjar was quoted as saying by state radio, without giving the date of the contract.

"The timing of the delivery will be announced at a later date," he added.

Earlier this year Moscow frustrated Washington by delivering to Tehran 29 TOR-M1 air defence missile systems, in a deal estimated to be worth 700 million dollars.

Iranian state media touted the S-300 as an even more sophisticated system than the TOR-M1, saying it could hit incoming enemy targets at a greater altitude. Iran said in January it had successfully test fired the TOR-M1.

The United States had urged Russia to cancel that sale, saying it was a mistake when the UN Security Council had imposed sanctions on Iran's ballistic missile industry as part of measures against its nuclear drive.

There was no immediate official confirmation of the new delivery from Russia, but the Interfax news agency quoted a senior Russian defence source as saying Iran would receive several dozen of the systems.

"In line with the contract signed several years ago, Russia will deliver to Iran several dozen 3RS S-300PMU1 anti-aircraft systems," the source said. Interfax said the deliveries would begin next year.

Russia, a veto-wielding permanent UN Security Council member, has important economic interests in Tehran.

A Russian contractor is also building and supplying fuel for Iran's first nuclear power station in the southern city of Bushehr, a much delayed project expected to be ready next year.

Moscow approved the two UN Security Council resolutions imposing sanctions against Tehran over the nuclear crisis, but also succeeded in watering down the measures and has been lukewarm on US efforts for a third.

Nevertheless, Russia has strongly urged Iran to obey the main demand of the West in the nuclear standoff -- that it suspends sensitive uranium enrichment activities.

Foreign Minister Sergei Lavrov said Russia was actively working to persuade Iran to suspend enrichment, offering Tehran the prospect of full negotiations with world powers if it did.

"From the economic point of view, Iran has no need to continue its programme of enriching uranium," he told the Vremya Novosti newspaper.

"We are trying to persuade the Iranians that Iran would benefit by suspending its programme, as this would immediately mean negotiations with the six (world powers dealing with the crisis) including the United States."

Iran's announcement of the delivery of the surface-to-air S-300 defence system comes amid continued international tensions over the Iranian nuclear programme, which the West fears could be used to make nuclear weapons.

The United States has never ruled out military action to end Iran's defiance, although a US intelligence report published earlier this month appears to have momentarily taken the heat out of the standoff.

The report said Tehran had halted a nuclear weapons programme in 2003, undermining US President George W. Bush's claims that it had an active atomic bomb drive. Iran denied ever seeking atomic weapons.

Iranian officials have vowed never to initiate any attack but have warned the armed forces will strike back with crushing force if the country's territory is hit.

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