Russia yesterday strongly denied that a cargo ship whose supposed seizure by pirates sparked an international mystery was carrying S-300 anti-aircraft missiles bound for Iran.

Foreign Minister Sergei Lavrov dismissed outright a report in a British newspaper that the Arctic Sea was carrying a batch of the sophisticated Russian-made missiles when it was hijacked.

Mr Lavrov said representatives of Malta, the flag government of the Arctic Sea, would be invited to take part in the investigation.

"Everything will be done transparently. I hope everyone will be convinced that the rumours you are referring to are absolutely groundless," Mr Lavrov said in response to a reporter's question.

Separately, Russian investigators announced that they had inspected the ship and found only its official cargo of timber.

"The cargo aboard the ship, wood and sawn timber, is being thoroughly inspected by investigators, as well as the ship itself," a spokesman for the investigative committee of Russian prosecutors said.

The Arctic Sea, a Maltese-flagged vessel with a Russian crew, was hijacked near Sweden in late July before being recovered by the Russian navy in the Atlantic Ocean several weeks later.

The hijacking of the ship in one of Europe's busiest shipping lanes, the huge international effort to recover it and the detention of its crewmen after they returned to Russia have fuelled speculation about a secret cargo.

Officially the ship was carrying a load of timber worth €1.16 million from Finland to Algeria, but speculation has raged that it was carrying weapons or even nuclear materials.

This weekend the Sunday Times of London, citing Russian and Israeli sources, reported that Israel's Mossad intelligence service had learned the ship was carrying S-300s to Iran and worked with Moscow to stop the shipment.

According to the Sunday Times report, Israel learned that the ship had been loaded with weapons in Russia's Baltic Sea port of Kaliningrad by former military officers with links to criminal groups.

The newspaper said that Mossad, acting with the Moscow government's backing, may have set up the hijacking in a bid to stop the shipment without causing Russia embarrassment.

Israeli President Shimon Peres visited Russia and held talks with his Russian counterpart Dmitry Medvedev on August 18, the day after Russia announced it had recaptured the Arctic Sea from pirates.

Following the talks, Mr Peres said he had secured a promise from Mr Medvedev that Russia would review its decision to sell S-300s to Iran. At the time, his visit appeared unrelated to the Arctic Sea, but The Sunday Times stressed a connection.

"Clearly the Israelis played a role in the whole Arctic Sea saga," the newspaper quoted a Russian military source as saying.

"Peres used the incident as a bargaining chip over the issue of arms sales to Arab states, while Israel allowed the Kremlin a way out with its claims to have successfully foiled a piracy incident."

Russia reportedly agreed to sell Iran S-300s several years ago, but Western countries and Israel fiercely opposed the deal as the missiles would greatly enhance Tehran's ability to protect against an air strike.

Eight suspects - including Russians, Estonians and Latvians - have been accused of hijacking the Arctic Sea and are now awaiting trial in Moscow on piracy and kidnapping charges.

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