In monetary terms, the value of these deals fell from 9.4 billion dollars to about 6.2 billion. By contrast, Russia made last year seven billion dollars selling weaponry to Asia, Africa and Latin America, a notable increase from 5.4 billion the year before.

This successful deal making has propelled Russia to the position of the top arms supplier to the developing world, the report said.

France rose to second place, inking last year 6.3 billion dollars worth of deals for delivery of military hardware, up from just one billion dollars in agreements in 2004.

France's success, the study said, was attributable to a 3.5-billion-dollar agreement with India for the sale of six Scorpene diesel attack submarines.

US congressional experts also predicted that an aggressive sales pitch by Paris could eventually collide with key interests of the United States and its allies as France usually pursued its national interests rather than NATO alliance considerations. "So the potential exists for policy differences between the United States and major West European supplying states over conventional weapons transfers to specific countries," warned Richard Grimmett, the main author of the report.

Russia's rise to the pinnacle of the world arms business was fueled by its booming trade with two emerging Asian giants -- Indian and China -- as well as Iran, a controversial client whose buying power was nonetheless greatly enhanced by high oil prices. Last year, Russia agreed to sell India 24 SA-19 air defense systems for 400 million dollars as well as Smerch multiple-launch rocket systems for about 500 million, according to the report.

Moscow will also overhaul an Indian diesel submarine for about 100 million, and to provide India with BrahMos anti-ship missiles.

In addition to fulfilling its long-term sales agreement with China for Su-27 fighter jets, destroyers and submarines, Russia also agreed last year to sell China 30 IL-76TD military transport aircraft and eight aerial refueling tankers for more than one billion dollars, the document said.

New arms deals between Moscow and Beijing also include sales of various military aircraft engines worth more than 1.2 billion dollars.

"These arms acquisitions by China are apparently aimed at enhancing its military projection capabilities in Asia, and its ability to influence events throughout the region," Grimmett noted.

Meanwhile, Iran, fearing airstrikes against its nuclear facilities, is buying from Russia 29 SA-15 Gauntlet air defense systems for over 700 million.

Moscow, the report said, also agreed last year to upgrade Iran's Su-24 and Mig-29 aircraft as well as their T-72 main battle tanks.

The US fall to third place was explained by a scarcity of new expensive contracts.

The largest US 2005 deal involved upgrading AH-64A Apache helicopters for the United Arab Emirates for a total of over 740 million dollars.

While noting that China's 2005 arms sales total was a modest 2.1 billion dollars, the report pointed out that Iran and North Korea were reportedly among clients receiving Chinese missile technology.

The document, therefore, warned that "China can present an obstacle to efforts to stem proliferation of advanced missile systems."

The CRS usually delivers its reports to interested lawmakers rather than the public.

The arms trade study was sent to legislators last week and obtained by AFP late Saturday.

Related Links
The Military Industrial Complex at SpaceWar.com