"S-300 systems have not been yet delivered to Iran under the contract concluded two years ago. The contract itself, though, is being gradually executed," the source in the Federal Military-Technical Cooperation Service told RIA Novosti.
Iranian media have repeatedly reported, citing senior security officials, that Russia has started delivering elements of the advanced version of the S-300 missile to Tehran.
"Russia is interested in fulfilling the contract, which is worth hundreds of millions of dollars," the source said, adding that the future of the contract would largely depend on the current situation in international affairs and the position of the Russian leadership.
The latest version of the S-300 family is the S-300PMU2 Favorit, which has a range of up to 195 kilometers (about 120 miles) and can intercept aircraft and ballistic missiles at altitudes from 10 meters to 27 kilometers.
It is considered one of the world's most effective all-altitude regional air defense systems, comparable in performance to the U.S. MIM-104 Patriot system.
The Russian Foreign Ministry said on Wednesday that military-technical ties between Moscow and Tehran had always been transparent and confirmed that S-300 air defense systems had not been supplied to Iran yet.
"We have delivered to Tehran a variety of equipment for defense purposes, which cannot destabilize the situation on the region," the ministry said in a statement.
Iran recently took delivery of 29 Russian-made Tor-M1 air defense missile systems under a $700-million contract signed in late 2005. Russia has also trained Iranian Tor-M1 specialists, including radar operators and crew commanders. The S-300 system is significantly superior to the Tor-M1.
Commenting on the S-300 deal, Ruslan Pukhov, director of the Moscow-based Center for Analysis of Strategies and Technologies, suggested that the Kremlin regards military-technical cooperation with Iran as leverage in a political game with the West.
"Moscow is using the S-300 contract, as well as its cooperation with Iran in general, simply as a tool in a political tradeoff with the West, rather than as a means to satisfy its fundamental defense and commercial interests," Pukhov said.
Meanwhile, he said that arms deliveries to Iran are important to Russia because Moscow is quickly losing its positions on key Asian arms markets in China and India.
"In these circumstances, it would be unwise to ignore the Iranian market with its potential demand valued at $300-500 million a year," the analyst said.
Pukhov warned that if Russia continued its cautious and two-faced policy in relation to Iran, Tehran would eventually choose China as key arms supplier, which could in the near future offer the Islamic Republic competitive products in all segments of the arms market.