In a swift response, visiting senior US diplomat, Undersecretary of State Nicholas Burns, said the United States was not happy with the deal.

"Several days ago Russia and Iran signed a contract for the delivery to the Iranian army of 29 Tor M-1 short-range anti-missile systems. The value of the deal could exceed 700 million dollars," the Russian official said.

"Iran hasn't concluded such a large contract with a foreign state in several years."

The mobile systems are capable of bringing down aircraft and missiles, the official said.

The deal comes amid unease in the West over Russia's role in helping Tehran develop nuclear energy, which Washington suspects may be a cover for an offensive nuclear weapons programme.

Speaking on the Echo Moscow radio station, Burns said he had raised questions about the deal with the Russian foreign ministry, which had promised to respond.

The Russian defence ministry official defended the sale.

"The ... delivery to Iran of the Russian goods will not in any way violate Russia's international obligations in the arms control sphere as these systems are considered to be defensive," he said.

Officials contacted by AFP refused to confirm the deal.

A spokeswoman for the systems' manufacturer, Kupol, said a contract for the sale of such systems had recently been signed, but declined to name the client.

"We recently signed a contract with a foreign state on the sale of Tor M-1 air defence systems," Maria Udalova said.

Commenting on reports of the deal earlier, the Vedemosti newspaper said Iran would be able to "defend itself against the United States and Israel with the Russian Tor M-1 systems".

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