Libya may agree to buy more than $2 billion worth of Russian weapons during a visit by Muammar Gaddafi to Moscow this month, Interfax news agency reported on Monday, citing an unidentified source in Russia's arms industry.
"An agreement on concluding a major set of arms contracts for more than $2 billion could be reached during the visit of Libyan leader Muammar Gaddafi to Moscow," Interfax quoted the source as saying.
The source said Gaddafi's visit to Moscow was planned for the end of October. Both the Libyan embassy in Moscow and Russia's state arms exporter declined immediate comment.
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Russian Foreign Minister Sergei Lavrov later said Moscow was preparing for the Gaddafi visit and that the final details of the trip would be announced soon, Interfax reported.
Russian warships visited Libya this month, signalling a warming of ties between Tripoli and Moscow, which supported Libya during the Soviet era.
Libya is interested in buying surface-to-air missile systems such as the S-300, TOR-M1 and Buk, as well as several fighter aircraft, dozens of helicopters and about 50 tanks, Interfax quoted the source as saying.
Russia is also preparing contracts to upgrade Libya's Soviet-era weapons, the agency said.
Libya wants Moscow to write off $4.5 billion in debts it owes to Russia in exchange for the purchases, Interfax said. Many Soviet-era debts are difficult to price because they were set in Soviet roubles.
Libya was seen as a rogue state by Washington until it agreed to give up a weapons of mass destruction programme. Last month U.S. Secretary of State Condoleezza Rice met Gaddafi in Tripoli, the first such visit in 55 years.
Libya wants to expand ties with Russia, which it sees as a counterbalance to US influence in the Mediterranean.
Prime Minister Vladimir Putin, while still Russian president, visited Libya in April to strengthen energy ties with the OPEC member and discuss the possibility of Russian cooperation in building an atomic power plant in Libya.
Putin said at the time that Libya was also seeking to buy Russian weapons.