Russia denied on Tuesday media reports that a cargo ship which was allegedly hijacked in July was carrying sophisticated anti-aircraft missiles for Iran, said a report.

Foreign Minister Sergei Lavrov was quoted by the BBC as saying the reports that the ship had illegal arms on board were 'absolutely untrue'.

The Maltese-flagged cargo ship Arctic Sea with a Russian crew went missing late July before it was recovered by the Russian navy on August 16 off West Africa.

Lavrov set aside media speculation about S-300 anti-aircraft missiles being on-board the Arctic Sea as 'groundless'.

Officially the 4,000-tonne ship that disappeared after leaving Finland was loaded with a cargo of timber worth GBP1.1 million ($1.8 million), destined for Algeria, the report said.

Russians added that nothing suspicious was found aboard the ship on inspection after its recovery, but have promised a deeper check upon the ship’s arrival at the Russia's port of Novorossiisk.

Lavrov said representatives of Malta, the flag government of the Arctic Sea, would be invited to be part of the inspection team, the report said.

'Everything will be done transparently. I hope everyone will be convinced that the rumours you are referring to are absolutely groundless,' Lavrov was quoted as saying in response to a reporter's question.

London's Sunday Times quoted sources in Russia and Israel claiming that the Arctic Sea was carrying arms to Iran and not timber, according to the BBC report.

It said that the sources claimed the ship had been loaded with S-300 missiles, Russia's most advanced anti-aircraft weapon, while undergoing repairs in the Russian port of Kaliningrad.

It also said Mossad intelligence service of Israel had learned the ship was carrying S-300s to Iran and worked with Moscow to stop the shipment.

The arms were sold by former military officers linked to the underworld, the Sunday Times reported.

Israeli President Shimon Peres held talks with his Russian counterpart Dmitry Medvedev on August 18, the day after Russia announced it had recaptured the Arctic Sea.

Following the talks, Peres announced he had secured a promise from Medvedev that Russia would review its decision to sell sophisticated S-300 anti-aircraft missiles to Iran.

Russia reportedly agreed to sell Iran S-300s several years ago, but the deal was vehemently opposed by Israel and some Western countries as it feared that the missiles would enhance Iran's resistance to air strikes.