Syria, Russia haggle over $2 billion arms deal

MOSCOW -- Syrian President Hafez Assad is expected to arrive in Moscow later this month to complete what could be an estimated $2 billion weapons deal with Russia, diplomats said.

The diplomats said Assad will arrive during the latter half of June to sign a contract with Russian leaders. They said the expected trip follows a month of intensive efforts by the two countries to agree on a repayment schedule.

"The big question is whether Assad will come even if the two sides don't agree on a repayment schedule," a Western diplomat said.

Assad cancelled a trip several days before his scheduled visit on April 10. Western diplomats said they are still stumped over why the Syrian president stayed home.

The prevailing view by diplomats is that Russia and Syria did not reach agreement on how Damascus would pay for a weapons deal. They said Assad agreed to buy the Russian S-300 anti-aircraft missile system to counter Israel's overwhelming air superiority.

But, the diplomats said, the two countries failed to conclude a debt repayment schedule. The Russians wanted a short repayment plan while the Syrians wanted to extend repayment over at least a decade.

"For the Russians, that raised questions whether the Syrians would pay at all," another diplomat said.

Another diplomat who represents a country that had been negotiating with Syria over an arms agreement agreed. He said those willing to sell to Syria want either cash-on-delivery or hard guarantees that payment would be completed soon after the system is deployed.

"No country today, and particularly Russia, wants to enter into an arrangement that binds them to Syria," the diplomat said.

Syria is also said to be interested in acquiring Russian planes and tank upgrades. But the diplomats doubt that Damascus will order much more than the S-300. Last year, Russia sold an S-300 system to Cyprus for an estimated $600 million but diplomats could not say how much Moscow is asking from Damascus.

After Assad's cancellation in April, a Russian military delegation held talks with Syrian Defense Minister Mustafa Tlas regarding the planned arms sale. Arab sources in Beirut said the talks went well and cleared the way for Assad's decision to reschedule his visit.

Russian diplomatic sources said Assad has already obtained necessary funding for the arms purchase. They said Syria acquired money from such countries as Iran and the Gulf states, pledges first given as early as 1995.

Syria is reported to owe Russia $11 billion for arms purchases made in the 1970s and 1980s. Assad, citing years of services provided to Russia, has refused to acknowledge the debt and Russian officials have quietly agreed not to make it an obstacle in discussions on future arms sales.