Russia seeks explanation as spy scandal tars reset

MOSCOW (Reuters) - Russia expressed irritation over a U.S. announcement it had arrested 10 Russian spies just days after President Dmitry Medvedev met Barack Obama, but stopped short of any outright denial.

U.S. authorities said on Monday they had broken up a major spy ring that recruited political sources and gathered information for the Russian government, hours after Medvedev flew back to Russia from a trip to North America.

"The choice of timing was particularly graceful," said Foreign Minister Sergei Lavrov, quoted by Russian news agencies during a trip to Jerusalem. "They have not explained to us what they are talking about. I hope they will explain."

U.S. authorities have charged 11 individuals with carrying out deep-cover work in the United States to recruit political sources and gather information for the Russian government.

The Justice Department accused them of operating under orders of Russia's SVR agency as 'illegals'; the term applied in the intelligence world to agents infiltrated to live and operate under false identities, rather than officers who use diplomatic cover or other legitimate cover.

Authorities said 10 of them were arrested on Sunday in Boston, New York, New Jersey and Virginia on charges including conspiracy to act as unlawful agents of the Russian Federation and money laundering.

Moscow has repeatedly accused Western powers of maintaining spying operations against Russia despite the end of the Cold War. Western powers also complain of Russian activity, especially in the commercial and scientific area.

CONTRADICTORY REPORTS

The allegations come just days after Obama hailed a "reset" in ties between the former Cold War rivals when the two leaders met in Washington.

Medvedev toured the United States in a bid to pitch Russia as an innovative, investor-friendly economy. Medvedev arrived back in Russia on Monday from the G20 summit in Toronto on Monday just hours before the U.S. Justice Department announced the arrests.

There has been no Russian denial that those arrested were working for Moscow, but Russian officials on Tuesday said the allegations were unclear.

"Very contradictory information is coming out, and no conclusions can be drawn from it," said Mikhail Margelov, head of the International Relations Committee within the Federation Council, or upper house of parliament.

A Foreign Ministry officials declined comment when contacted by Reuters, but ministry officials told Russian news agencies that they were studying the "contradictory" reports.

Russia's foreign intelligence service and the chief spokesman for Prime Minister Vladimir Putin told Reuters they had no comment on the spying allegations.

Putin's spokesman Dmitry Peskov added that the allegations were unlikely to be discussed during Tuesday's meeting between the Prime Minister and former U.S. President Bill Clinton in Moscow.

(Additional reporting by Dmitry Zhdannikov; Writing by Amie Ferris-Rotman and Conor Humphries; Editing by Ralph Boulton)