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Russia To Reimburse Iran For Canceled Missile Deal

Russia announced Thursday that it would return the entire advance payment it had received from Iran for supplying the S-300 air defense system, following its cancellation by the Kremlin to comply with a recent U.N. resolution imposing additional sanctions on Iran.

Sergei Chemezov, head of the state-controlled Russian Technologies, said Thursday that his country would repay the entire advance payment of $166.8 million.

"Of course, they are not very pleased. We do not have a choice," Chemezov told reporters in Cyprus, where he was accompanying Russian President Dmitri Medvedev.

The move comes weeks after President Medvedev issued a decree on September 22, banning the sale of S-300 air defense systems to Iran. The decree indicated that the ban was part of "measures to implement the United Nations Security Council resolution 1929 from June 9, 2010."

The delivery of the the Russian S-300 missile system would have boosted Iran's ability to defend against air strikes, prompting Israel and the United States to voice their objection to the deal soon after Russia signed the contract in 2007.

Both the United States and Israel have not ruled out attacks on Iran's atomic facilities, and their objections to the sale was based on fears that the sophisticated Russian air defense system could hinder such attacks.

The Russian S-300 missile system is believed to be capable of intercepting and destroying ballistic missiles at a range of more than 40 kilometers, and its performance is said to be similar to that of the American Patriot missile system.

Iran already faces four sets of sanctions from the U.N. Security Council following refusal to halt its nuclear- development work. Apart from these sanctions, the European Union, Japan and the United States have imposed their own on Iran over its disputed nuclear program.

Though Iran insists that its nuclear program is intended for peaceful civilian purposes, the West suspects that it is just a cover-up for the Islamic country's nuclear-weapon ambitions.

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