Speaking ahead of the three days visit to Tehran of his Russian counterpart Marshal Igor Sergeyev that is due today, Mr. Shamkhani, a revolutionary guard officer, pointed out that the geographic position of the two countries in this sensitive region of the world makes the necessity for a close cooperation between Iran and Russia inevitable".

To the memory of Iranians, this is the first tine that a Russian Defence minister comes to neighbouring Iran on an official visit.

"The visit would should help develop and increase Iranian-Russian cooperation at the regional and international level", a spokesman for Iranian Defence Ministry told the official news agency IRNA.

"Experts think that Iran will spend 25-27 billion dollars on re-armament, and we can expect about seven billion dollars of that," with the other contracts awarded to China and Europe, Gladkevich said, according to an Agence France Presse (AFP) dispatch from the Russian capital.

Russia had originally agreed to stop all scheduled exports of tanks, armored personnel carriers and, more notably, Kilo-class attack submarines that Iran could use to patrol the Persian Gulf, by the end of the year.

The decision surprised Washington and prompted the Clinton Administration to warn Moscow about possible trade sanctions both against Russia and all Russian firms selling arms to Tehran, but no direct measure has been taken since so far.

But although no official documents are set to be signed, Sergeyev's visit and its timing would hardly please the new Administration and its extensive interests in the oil-rich but tense region, American diplomats observed.

In Moscow, Makiyenko said, some analysts suspect that Iran is being used as a bargaining chip in US plans to build a nuclear defence shield, that Moscow fears and which breaches the 1972 Anti-Ballistic Missile Treaty (ABM).

"Possibly, behind the scenes, an agreement has been reached in which Moscow gets Iran in exchange for the softening of its position on the ABM," Makiyenko said.

Vice-president-elect Dick Cheney is reported to favour a lifting of the oil embargo imposed unilaterally on American oil firms by the outgoing US government under the Iran-Libya Sanctions Act.

Iran’s Deputy Foreign Ministry for Europe and America Ali Ahani made the proposal during his last visit to Moscow on 14 December, warning that NATO’s inroads into Central Asian region not only harms security of Iran and Russia but also endangers China and India.

"It’s of high importance that our nations discuss the region’s security problems and stop aggressive plans by NATO", Mr. Ahani told Russian Duma’s Defence Committee Chairman General Andrei Nikolayev.

Welcoming Moscow’s decision to scrap the Gore-Chernomyerdin agreements, Mr. Ahani also said "Russian security depended on Iran’s".