The US ambassador in the Azeri capital Baku said that Washington, which has so far invested some 30 million dollars in upgrading Azerbaijan's coastguard with a sophisticated radar system, personnel training and ship repair, is also pushing for the country's navy to undergo similar improvements.

The Caspian region is strategic both because of its huge oil potential and because of its geographical position between Russia and the Middle East.

The United States plans to spend a total of 135 million dollars within the framework of the US-funded Caspian Guard Initiative, which envisions improving the capabilities of the maritime forces of Azerbaijan and Kazakhstan, Ambassador Reno Harnish said.

"Only recently have we started to see that we need both of them" -- the coastguard and navy -- "to cooperate to make this thing work," Harnish told AFP in a recent interview in the US embassy compound.

"We've mentioned this to the government of Azerbaijan and we're working on it -- it's a thing in progress," he added.

US officials have pointed to Kazakhstan's accession in August to Washington's Cooperative Threat Reduction agreement as a sign that it may be prepared to join the Caspian Guard program under that agreement as well.

"This is an unpredictable region," Harnish said in answer to a question on why Washington was keen on upgrading the two ex-Soviet republics' sea forces.

The Caspian Sea is home to some of the world's largest oil deposits with an estimated 37 billion barrels of oil in the Azerbaijani and Kazakhstani sectors alone.

Deposits that straddle yet-undelineated maritime borders between Azerbaijan, Kazakhstan, Russia, Iran and Turkmenistan are often a source of friction for the states' navies.

Meanwhile the United States has backed the construction of the four-billion-dollar Baku-Tbilisi-Ceyhan oil pipeline that is scheduled to start pumping oil to the Mediterranean coast of NATO ally Turkey in the final quarter of 2005.

High placed US energy department officials have indicated that the United States would be interested in seeing Kazakhstan commit its Caspian reserves to transport to the West through the pipeline, along one of the few routes that avoids Russian territory.

In a separate security program, the International Narcotics and Law-enforcement program, the United States has provided Azerbaijan with training on how to protect the pipeline.

"We also do training with the navy on how they may protect assets at sea," Harnish said.

US defense contractor Washington Group International and handful of military consultants have so far helped construct two radar stations and a computerized operational headquarters in Azerbaijan.

If the program is expanded according to plan, that temporary facility will be replaced by a larger Joint Control and Command Center that will analyze data collected by both the navy and the coast guard.

One of the largest US overseas defense contractors, the Washington Group stressed that the assistance it was providing to the Azerbaijani military was non-lethal.

"Although we are supporting the Azeri navy, this is not connected with any kind of weaponry," said Zaur Aliyev, support service manager for the Washington Group's Baku office.

The US-built radar stations, as well as a network of Azerbaijan's own Soviet-era radars, have already begun to sweep Azerbaijan's territorial waters.

They are looking in particular for boats carrying illicit cargoes such as weapons of mass destruction, illegal narcotics, conventional weaponry and suspected militants, Harnish said.

Kazakhstan can expect similar assistance if it joins up, the diplomat said.

With Iran and Russia straddling its borders, Azerbaijan itself has remained tight lipped on the military assistance it receives from the United States.

A defense ministry spokesman, Ramiz Melikov, told AFP "no such program exists," in reference to the Caspian Guard initiative.

Meanwhile, rumors that the US plans to open a full fledged military base here have been denied both by the Azerbaijani authorities and US officials.

The Caspian guard program does not target any particular country in the region, Harnish said.

However one of the US built radars is positioned just a few kilometers (miles) from the Iranian border in Astara while another sits atop a mountain north of the capital Baku, and south of Russia's volatile North Caucasus.

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