This has raised speculation that it may brush aside the strident objections of the United States and Israel and supply Iran with advanced S-300PMU surface-to-air missiles that would greatly enhance its defenses against airstrikes.

The Russians, who have rejected the proposed imposition of economic sanctions on Iran as "counterproductive," are keeping the waters muddied with contradictory and ambiguous statements regarding the S-300s.

On Wednesday, Russia's Interfax news agency, citing a Russian government source, reported that Tehran has not yet paid Moscow any money under a 2005 contract worth an estimated $800 million because Moscow has not yet given its final approval for the deal.

"The contract … was frozen indefinitely due to an array of circumstances … right after it was signed," the source was quoted as saying. "Much depends on an array of political circumstances since this contract has ceased to be simply a commercial deal."

However, the following day, Russia's Federal Service for Military and Technical Cooperation declared in a rare statement: "The Russian Federation implements and plans to further implement the military-technical cooperation with the Islamic Republic of Iran in strict accordance with existing legislation and its international obligations."

According to Interfax, if the sale does get final approval from the Kremlin, delivery could begin immediately since the missiles have been fully readied for shipment in Defense Ministry depots.

The deal involves five batteries of S-300PMU1 missiles -- 40-60 launchers each with four tubes, along with radar and fire-control units.

According to the Eurasia Daily Monitor published by the Jamestown Foundation, a Washington think tank, all the missiles earmarked for Iran have been drawn from Defense Ministry inventories.

Meantime, the Kremlin is keeping the Americans and their Israeli allies guessing about what it will do.

On Thursday RIA-Novosti quoted an unidentified Defense Ministry official as saying that since the S-300s are "defensive weapons" Moscow was under no international obligation to scrap the contract.

He claimed that Russia would suffer severe financial losses if it decided to tear up the S-300 contract.

Russian military analyst Konstantin Makiyenko has said that reneging on the contact cost Moscow around $1 billion in lost profits plus $300 million to $400 million in fines and penalties.

However, it has been widely reported that Saudi Arabia has offered Russia major arms purchases worth around $2.8 billion if Moscow scraps the sale of S-300s and other advanced weapons systems to Iran.

Russia has long wanted to break into the highly lucrative Gulf arms market, but it has also built up close defense ties with the Islamic Republic, where it is building a nuclear reactor near the northern Gulf port of Bushehr.

The S-300PMU1, which has the NATO designation SA-20 Gargoyle, is a mobile system designed to shoot down both aircraft and cruise missiles at a range of up to 75 miles.

It is also supposedly immune to electronic jamming and can engage multiple targets simultaneously. The latest version, the S-300PMU2 Favorit, has a range of 120 miles.

The S-300 family is considered one of the world's most effective all-altitude air-defense systems, comparable to the U.S. MIM-104 Patriot system.

Western military experts say the S-300, operating alongside the Tor-M1 short-range air-defense system already supplied to Iran by Russia, would make Iran's key nuclear facilities virtually immune to U.S. or Israeli air and missile strikes, or at the very least extremely costly to any attacker.

Without the S-300PMU1s, Iran does not have an effective air defense for its nuclear infrastructure, so presumably Tehran would go to great lengths to get its hands on these missiles.

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