President Bush yesterday telephoned Russian President Vladimir Putin to complain directly that Russian companies have been selling sensitive military equipment to Iraq in breach of UN sanctions.
The episode marks a further deterioration in relations between Washington and Moscow which have cooled considerably since the US-led war on Iraq began over the objections of Russia and most other UN Security Council members.
Also yesterday, Russian Foreign Minister Mr Igor Ivanov alleged the US was trying to seize control of Iraq's oil while shutting out companies from Russia and elsewhere.
The White House said it had "credible evidence" that Russian companies had sold military equipment such as satellite-jamming devices, anti-tank missiles and night-vision goggles to Iraq.
White House spokesman Mr Ari Fleischer said Mr Bush raised with Mr Putin "reports of ongoing co-operation and support to Iraq's military forces being provided by a Russian company that provides GPS [global positioning systems] jamming equipment." He added: "These actions are disturbing and we've made our concerns clear."
Separately from the telephone call, the US made a formal complaint to Moscow over the alleged sanctions-breaking sales which it said were made by three Russian companies.
The Washington Post, quoting administration officials, identified two of the firms as KBP Tula and Aviakonvesiya, a Moscow-based company. It said KBP had supplied anti-tank guided missiles and Aviaconversiya provided the jamming devices. Directors of both companies denied the charges in Moscow yesterday.
From Moscow, Mr Andrei Kokoshin, a former head of the Russian Security Council, said he was "100 per cent" sure Russian companies had not sold prohibited equipment to Iraq, but said the goods could have been supplied by Russia to another country, such as Ukraine, which then resold them to Iraq.
Mr Putin promised Mr Bush he would look into the allegations immediately, Mr Fleischer said, adding that the US President "will look forward to his reply."
Mr Putin reportedly warned Mr Bush that the war was bringing about a humanitarian crisis in Iraq, echoing complaints by Mr Ivanov at the weekend that civilian deaths confirmed that the military strike was "indeed a big mistake."
Mr Ivanov said in Moscow that "no fact supporting the Americans' anxiety has been found" about the arms sales, and that Russia had responded on March 17th to several US queries about the alleged sales since October.
If there were any indication that Russian companies had shipped such goods, it would be investigated as a serious violation of Russian law, he added.
Aviakonvesiya was founded in the early 1990s by Russian military officers to dispose of military hardware. Allegations of its links to Iraq go back to 2000, with reports it had sold jamming devices to the regime.