Libya has struck a deal to buy Russian arms worth almost two billion dollars, Russian news agencies quoted Prime Minister Vladimir Putin as saying Saturday.

"Yesterday (Friday), a contract worth 1.3 billion euros (1.8 billion dollars) was signed. It does not only involve firearms", Putin was quoted as saying by Ria Novosti and Interfax.

Putin was speaking following a meeting with the head of the Izhmash factory, which manufactures Kalashnikov rifles.

Russian officials said early this week that negotiations were underway with the Libyan Defence Minister Younes Jaber in Moscow over the sale of Russian weapons.

The Russian prime minister did not specify the type of arms or military equipment involved in the deal.

But a Russian diplomatic source told Interfax Tuesday however that Libya wanted to acquire 20 fighter planes, at least two S-300 air defence systems, several dozen T-90C tanks and other arms.

Moscow and the North African state enjoyed close ties during the Cold War, and much of Libya's arsenal was purchased from the Soviet Union in its last years.

Moscow and Tripoli have stepped up their contacts in recent years. In 2008 Libyan leader Moamer Kadhafi visited the Russian capital in his first visit to Moscow since the 1980s.