* Arms deal includes tanks, rocket launchers
* Azerbaijan military build-up worries Armenia
* Still no peace treaty in Nagorno-Karabakh conflict
MOSCOW, June 18 Russia has begun delivering
tanks, artillery cannons and rocket launchers worth $1 billion
to Azerbaijan, a Moscow-based defence group said on Tuesday, as
the former Soviet republic strengthens its military readiness in
the volatile South Caucasus.
Oil- and gas-producing Azerbaijan, where President Ilham
Aliyev faces re-election in October, has boosted arms spending
and threatened to take back the disputed territory of Nagorno-
Karabakh by force from neighbouring Armenia.
Nestled between Iran, arch-rival Armenia and its former
Soviet master Russia, Azerbaijan sits on a web of oil and gas
pipelines that carry its offshore energy reserves to Europe via
Turkey, its ally.
The arms package, signed in a series of contracts between
2011 and 2012, includes nearly 100 T-90C tanks, Smerch and
TOS-1A multiple rocket launchers and Msta-A and Vena artillery
cannons, said Ruslan Pukhov, director of defence think tank
A source at the Russian Defence Ministry said the order had
been on hold for some time to avoid upsetting the military
balance in the South Caucasus, where Russia has a military base
in Armenia and an agreement to defend the country if it comes
under attack. But the deal had been pushed through at the behest
of Russia's powerful arms industry, he said.
A spokesman at Russia's state arms exporter Rosoboronexport
was unavailable for comment.
Russia has almost completed deliveries of a previous, larger
package, estimated by CAST as worth $2-3 billion and including
S-300 missile systems and attack helicopters. Azerbaijan has
also announced a $1.6 billion arms deal with Israel.
Although political and defence analysts doubt Azerbaijan has
any immediate appetite for war, it has increased its military
spending in recent years. Aliyev has said spending on defence
will reach $3.7 billion this year.
Armenian President Serzh Sarksyan said last year that
Azerbaijan was accumulating a "horrendous quantity" of arms and
was threatening Armenia with a new war.
Azerbaijan and ethnic Armenians fought a war in the early
1990s in the mountainous Nagorno-Karabakh enclave which is
About 30,000 people were killed in the war, which ended in a
truce in 1994, although no peace treaty has never been agreed.
(Reporting by Thomas Grove; Editing by Mark Trevelyan)