BEIRUT (Reuters) - Syria has received the first shipment of a sophisticated air defense system from Russia, President Bashar al-Assad was quoted as saying, sending a signal of military strength days before an EU arms embargo on the country lapses.
Russia had promised delivery of the S-300 missile system to the Syrian government despite Western objections, saying the move would help stabilize the regional balance at a time of insurgency in Syria waged by Western-backed rebels.
Moscow is a staunch ally of Assad and it has appeared to grow more defiant since the European Union let its arms embargo on Syria expire as of June 1, opening up the possibility of the West arming the Syrian rebels.
"Syria has received the first shipment of Russian anti-aircraft S-300 rockets," Lebanese newspaper al-Akhbar newspaper quoted Assad as saying in an interview due to be broadcast later on Thursday.
More of the missiles would arrive soon, he was quoted as saying.
A source close to Russia's Defense Ministry said there had been a "bank transfer" in connection with the S-300 transaction but that Russian banks were becoming increasingly nervous about dealing with Assad.
"There were some problems with payments because big Russian banks were scared of dealing with Assad, but there was a bank transfer," the source said. "There are also not big banks and banks that are not based in Moscow. Beyond the down payment there was almost certainly a second payment, maybe a third."
Last year, a source close to Russia's weapons export monopoly Rosoboronexport said Syria had paid 20 percent of the contract price, but that the S-300 deal was frozen because of the country's civil war.
The United States, France and Israel have all called on Russia to stop the missile delivery.
More than 80,000 people have been killed in Syria since peaceful protests against four decades of Assad family rule morphed into a civil war, pitting the president's forces and his ally, Hezbollah, against Syrian rebels and a flow of Sunni Islamist militants who have come to help them from abroad.
Moscow says the expiry of the EU embargo complicates U.S. and Russian-led efforts to set up a peace conference between the Syrian government and its opponents, who demand an immediate end to Assad family rule.
GENEVA 2 CONFERENCE
The interview with Assad was to be released on Thursday on Al Manar, a television station linked to Assad's ally, the Shi'ite Muslim militant group Hezbollah.
Assad said he planned to go to the "Geneva 2" conference, al-Akhbar reported, though he was unconvinced of a fruitful outcome and pledged to continue fighting the uprising.
Officials in Israel, the United States' main ally in the region, say the S-300 could reach deep into the Jewish state and threaten flights over its main commercial airport near Tel Aviv.
Al-Akhbar said Assad also stressed ties between his forces and Hezbollah militants now openly fighting on the Syrian side of the Lebanese-Syrian frontier. "Syria and Hezbollah are part of the same axis," al-Akhbar quoted him as telling al-Manar.
"The Syrian army is the one fighting and leading the battles against the armed group, and this fight will continue until all those who are called terrorists are eliminated."
Syria straddles the fault lines of several regional and sectarian conflicts, and the violence in the country is increasingly seeping across its borders.
Israel, wary of any Syrian weapons being sent to Hezbollah in Lebanon, has already carried out three air strikes against Damascus to stop suspected transfers.
A recent series of strikes in Damascus, which shook the entire capital, stoked an angry reaction from Syria. State media outlets said Syria would respond to any further attacks and would also allow militant groups to attack Israel from a shared border on the Golan Heights.
Israel captured much of Syria's Golan Heights in a 1967 war and occupies the territory today, but Assad and his father, the deceased president Hafez al-Assad, had kept the border quiet for decades.
"The Syrian government will not stand in the way of any Syrian groups that want to wage a war of resistance to liberate the Golan," Assad was quoted as saying in the interview.
Hezbollah has said it is willing to support groups that chose to launch operations from the Golan.
Israel has become particularly wary of the S-300 shipments although Defense Minister Moshe Yaalon said on Tuesday that the shipments were not yet on their way.
Earlier this month, Israel was reported to have told Washington that Syria had begun payments for a $900 million purchase of S-300s, with an initial deliver due within three months.
(Additional reporting by Thomas Grove in Moscow; Editing by Mark Heinrich)