MOSCOW (Xinhuanet) -- Russia will proceed with a deal to sell Tor-M1 short-range missiles to Iran despite the dispute over Iran's nuclear program, Defense Minister Sergei Ivanov said on Friday.

Moscow cut a 1-billion-U.S.-dollar deal with Tehran in November to supply it with Tor-M1 short-range missiles. Russian officials described these missiles as air defense systems that are used only to bring down aircraft and guided missiles at low altitudes but cannot strike ground targets.

"The contract on these systems is not linked and cannot be linked to (Iran's) nuclear dossier," Ivanov was quoted by the Interfax news agency as saying.

The contract is also in line with international law and Russian and Iranian laws, Ivanov said, adding the missiles are purely defensive weapons.

Ivanov also warned on Friday Iran may be referred to the United Nations Security Council if it continues with its nuclear research.

Iran, however, says its nuclear work is merely designed to meet its energy needs and insists on the right to develop a full nuclear fuel cycle.

"In this situation, I cannot exclude such a possibility. It is rather likely," Ivanov, who is also deputy prime minister, was quoted by the Interfax news agency as saying.

But Ivanov insisted political and diplomatic means for solving the issue have not been exhausted and everything should be done to prevent the situation from developing toward a confrontational situation.

Russia, which is helping Iran build its first nuclear power plant in Bushehr, has proposed to enrich its uranium in a joint venture on the former Soviet republic's soil.

"The proposal is still on the table and is valid," Ivanov said.