Kremlin sources have reportedly confirmed that Russia will supply Iran with five state-of-the-art S-300 anti-aircraft missile batteries and a new nuclear reactor in Bushehr.

After calling off a transfer of five S-300 missile batteries to Iran three years ago, Russia is now interested in renewing the agreement and in setting up a civilian nuclear reactor for its long-time ally as part of a deal worth $800 million, Russian newspaper Kommersant reported Wednesday.

The two countries initially signed the S-300 missile system deal in 2007, but it was called off three years later as part of UN Security Council sanctions against the Islamic Republic. The cancellation of the agreement led to tensions between the two countries, including a $4 billion Iranian lawsuit against Russia.

Israel and the West have expressed concern in the past over Iran obtaining the state-of-the-art anti-aircraft missiles, as they could severely affect the outcome of an airstrike against Iran’s nuclear reactors.

Russian President Vladimir Putin is set to meet Friday with Iranian President Hasan Rouhani in Kazakhstan, where the two leaders are expected to discuss the deal in further detail, the report said.

Rouhani on Tuesday stated that his country “will not give up one iota” of its nuclear program, despite recent hopes that the new president, widely considered a relative moderate, would cooperate with United Nations inspectors on his country’s nuclear facilities.

Israel’s Defense Minister Moshe Ya’alon speculated in June that Russia would deliver the the S-300 anti-aircraft missile system to Syria in 2014.

The sale of Russian missiles to the embattled regime of Syrian President Bashar Assad was a hot topic earlier this year. Prime Minister Benjamin Netanyahu met with Russian President Vladimir Putin in May in an attempt to dissuade him from going ahead with the deal, reportedly indicating that Israel would destroy Syrian S-300 missiles before they became fully operational.

Israeli media had earlier reported that Netanyahu warned Putin of a descent into war should Russia make the delivery. Netanyahu said that if acquired by Assad, the S-300 “is likely to draw us into a response, and could send the region deteriorating into war,” Channel 2 reported in the immediate aftermath of the meeting.

Aside from the unique strategic capacities that the S-300 air-defense missiles would afford Syria, putting planes taking off from central Israel and its main international airport within the missiles’ range, Jerusalem also fears that the system could fall into the hands of terror groups like Hezbollah.

Some experts say that Putin has thus far been loath to supply the S-300 system to Iran or Syria for fear that Israel’s advanced radar-scrambling abilities could beat the system in a future airstrike, thus deterring other potential buyers.

On Wednesday, a senior Russian lawmaker said that Russia could expand arms sales to Iran and revise the terms of US military transit to Afghanistan if Washington launched a strike on Syria.

Alexei Pushkov, the Kremlin-connected chief of the foreign affairs committee in the lower house of parliament, told lawmakers that Russia hoped the US would back Russia’s proposal for Syria to put its chemical weapons under international control for their subsequent dismantling.

During Wednesday’s debate of a draft resolution on Syria, Communists called for an increase in Russian weapons supplies to Iran and a revision of conditions for transit via Russia of supplies for US forces in Afghanistan.

Pushkov said action now would be premature, but warned that if the “party of war” prevails in Washington, Russia should consider those moves.

Asher Zeiger contributed to this report.