"The contract is in the implementation stage," news agencies quoted Defence Minister Anatoly Serdyukov as saying.

Russia initially agreed to send a large shipment of anti-ship Yakhont cruise missiles to Syria in 2007 under the terms of a controversial deal that was only disclosed by Serdyukov in September 2010.

The revelation infuriated both Israel and the United States and there had been speculation that Russia would decide to tear up the contract amid the current turmoil plaguing north Africa and the Middle East.

Israel -- which is still technically in a state of war with Syria and fears its close ties with Iran -- suspects that the shipment is ultimately aimed at supplying Hezbollah militants in neighbouring Lebanon.

The disputed sale is believed to be worth at least $300 million (218 million euros) and is meant to see Syria receive 72 cruise missiles in all.

Russia has not officially confirmed making any Yakhont deliveries to date.

But Interfax cited one unnamed military source as saying that Russia had already sent Syria two Bastion coastal defence systems that can include up to 36 Yakhont missiles each.

The feared complex can only operate when equipped with radar and target detection helicopters and it was not clear from Serdyukov's comments which supplies -- if any -- had already been received by Syria.

The Israeli ambassador to Moscow confirmed that his country was primarily worried the missiles would end up in the hands of the Shiite Hezbollah movement that receives strong backing from Syria.

"The question of these missiles' deliver to Syria really has triggered a negative reaction in Israel," Dorit Golender told the Interfax news agency.

"And this is understandable since Hezbollah has repeatedly used weapons that they received either from Lebanon or Syria."

Serdyukov's statement comes amid Russian efforts to keep its military supply lines open to the Middle East despite the wave of revolutions and social unrest sweeping the region.

A source in the Russian arms exports industry said this week that the fall of the region's regimes may see the country lose about $10 billion dollars in contracts.

Serdyukov himself confirmed that the unrest may force Russia to give up some of its Soviet-era clients in the Arab world.

"There is a chance we might lose something," the defence minister said on a visit on visit to Russia's Pacific port city of Vladivostok.

"But I hope that the main weapons and military equipment agreements will be fulfilled," Serdyukov said.

Russia's sales to Syria have come under particularly close scrutiny because of fears that Moscow may be also be covertly assisting Damascus' nascent nuclear programme.

The head of the country's arms export corporation in October denied that Russia had also signed an agreement to supply Syria with its latest range of MiG-31 fighter jets.

But the same agency confirmed in May that Russia was in the process of supplying Syria with a less advanced fighter jet version -- the Mig-29 -- along with short-range air defence systems and various armoured vehicles.

Russia is the world's second-largest arms exporter behind the United States and its sales are crucial to the country's efforts to keep alive a creaking defence industry whose reforms have dragged on for years.

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