Russia may sell Iran $1 bln of civilian aircraft

MOSCOW (Reuters) - Iran has started talks to buy 30 Russian Tupolev passenger aircraft worth more than $1 billion, a source with knowledge of the deal told Reuters on Monday.

The source, who asked not to be identified, said the deal for 30 Tupolev-204 aircraft was likely to be reached by the end of the year.

The deal would greatly embarrass Western powers which are trying to persuade Russia and China to join them in tightening sanctions on Iran to make it halt its uranium enrichment program. They suspect it of trying to build nuclear weapons, but Iran says it wants only to produce electricity.

A spokesman for Ilyushin Finance, which is selling the planes, confirmed that negotiations had begun.

"We have started talks to deliver a new order of aircraft," spokesman Andrei Lipovetsky said, but declined further comment.

Russia has already sold Iran military air defense systems and is building a nuclear plant in Bushehr, to the annoyance of the United States and Israel.

Russia and China, both with strong trade ties with Tehran and veto power on the U.N. Security Council, have argued in favor of more negotiations to encourage Iran to comply with the international demand for a halt in uranium enrichment.

President Vladimir Putin, trying to revive Russia's once mighty aviation industry, has grouped companies like Tupolev and Sukhoi into one giant, state-controlled holding called the United Aviation Corporation.

The corporation has ambitious plans to sell $250 billion worth of aircraft by 2025 and overtake even Soviet-era production records to compete on the world market with giants such as Boeing and Airbus.

Iran's domestic flights have a chequered record and Iranians often say they fear to fly on the elderly, rickety fleet.

In February 2002, a Tupolev-154 operated by Iran Air Tours crashed into a mountain in western Iran, killing 117 people.

(Reporting by Anton Doroshev, writing by Guy Faulconbridge, editing by Tim Pearce)