Iran has filed a lawsuit at the International Court of Justice in a bid to force Russia to sell it the powerful S-300PMU air-defense system under an $800 contract Moscow abrogated in 2010, citing U.N. sanctions against Tehran over its nuclear program.

But Moscow's move in reneging on the 2007 deal was largely political, and if its relations with the West deteriorate it could decide to deliver the five mobile units it agreed to sell the Iranians.

Much will depend on how important Moscow views its relations with Iran.

Russia has been a key arms supplier to the Islamic republic in the past and is building a nuclear reactor on the Persian Gulf coast at Bushehr, despite repeated U.S. objections.

It's likely the S-300s could become a major pawn in Russia's relationship with the United States.

Right now Moscow is looking to the West to help modernize strategic economic sectors, so it's unlikely it will accede to pressure from Tehran in a legal dispute that could drag on for years.

Iran's ambassador to Moscow, Mahmoud-Reza Sajjadi, said Aug. 24 Tehran rejects the Russian claim that air-defense systems fall under the U.N. sanctions and expects the court to authorize the delivery of the missiles.

Iran made a down payment of $170 million after the contract was signed in December 2007.

Tehran wanted to take delivery of the S-300s as soon as possible because it was concerned at the time that Israel would unleash pre-emptive airstrikes against its nuclear program.

The S-300 is considered one of the world's most advanced air-defense systems, ranking alongside the all-altitude MIM-104 Patriot system built by the Raytheon Co. of Massachusetts.

It would be a formidable addition to Iranian air defenses around key nuclear installations.

The system, developed by NPO Almaz of Moscow, can engage multiple targets, missiles as well as aircraft, at ranges of more than 100 miles at low and high altitudes.

U.S. military officers said the S-300 would be a "game-changer" for Iran if it ever received the mobile batteries.

At present, the Iranian air-defense system does not have anything remotely as powerful as the S-300.

Israeli aircraft could penetrate without too much trouble, although there would be losses. But with S-300s in place it would be immensely more difficult to knock out any nuclear sites and losses would be much higher.

Russia has sold the S-300PMU to most of the former Soviet republics as well as to China and North Korea.

The United States and Israel pressed Moscow hard not to deliver the missiles to Iran, and this is understood to have influenced Moscow when Tehran demanded the S-300s be delivered.

The U.N. sanctions, imposed in June 2010, supposedly provided a convenient way out for the Russians.

"The promise of the sale to Iran has served as leverage for Moscow in its negotiations with the United States, and Moscow does not want to lose that leverage," observed U.S. security think tank Stratfor.

"Furthermore, actually delivering the missile systems to Iran would cause a major break in relations between Russia and the West at a time when Russia is looking to the West for assistance, increasing cooperation with the United States and strengthening its relationships with Western European powers."

As it is, Russia has another reason not to provide Iran with the S-300s: It's expected to wrap production of the system this year.

Moscow has been replacing its own deployed S-300s with the more advanced S-400 over the past few years.

It's believed to be ahead of schedule in developing the S-500s system, which could be ready for production by the end of 2012.

But, Stratfor cautioned, if Moscow's dealings with the West go sour, it would still have stocks of S-300s, including those it will be replacing, to send to Iran if it decided the geopolitical climate had changed.

And it could also use third parties to make the deliveries, as it has in the past to mask politically sensitive arms sales.

"Russia is planning to replace S-300s with S-400s in its allied neighboring countries, like Belarus, Armenia and Kazakhstan," Stratfor said.

"Any Iranian officials' visits to such countries could indicate whether Russia is in fact delivering the S-300s to Iran, as Tehran's ability to acquire the system cannot be ruled out."

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