The Maltese-flagged ship that vanished for some days had been carrying arms to Iran and was being tracked by Mossad, the Israeli security service, The Sunday Times (of London) reported yesterday quoting unnamed sources in both Russia and Israel.

The Arctic Sea "disappeared" en route from Finland to Algeria on July 24, officially carrying a cargo of timber. It was found off West Africa on August 17 and eight alleged hijackers were arrested, although the Malta Maritime Authority later said the ship's whereabouts had always been known to the authorities.

The Kremlin has denied that the vessel was carrying a secret cargo, claiming the ship was hijacked by criminals who demanded a ransom.

The Sunday Times said this official version was challenged by sources in Tel Aviv and Moscow who claimed the ship had been loaded with S-300 missiles, Russia's most advanced anti-aircraft weapon, while undergoing repairs in the Russian port of Kaliningrad. Mossad, which closely monitors arms supplies to Iran, is said to have tipped off the Russian government that the shipment had been sold by former military officers linked to the underworld.

Sources told the newspaper that Mossad may have played a part in the alleged hijacking of the ship by setting up a criminal gang, who were unlikely to have known anything about a secret cargo.

"Once the news of the hijack broke, the game was up for the arms dealers. The Russians had to act. That's why I don't rule out Mossad being behind the hijacking. It stopped the shipment and gave the Kremlin a way out so that it can now claim it mounted a brilliant rescue mission," one source told The Sunday Times.