Libya has signed an arms deal with Russia worth 1.3 billion euros ($1.8 billion), Russian Prime Minister Vladimir Putin was quoted as saying on Saturday.

'Only yesterday we signed a contract worth 1.3 billion euros,' Putin said, according to RIA Novosti.

'And it's not only small arms,' he added, without specifying which weapons Libya intended to purchase.

Interfax news agency quoted a military-diplomatic source as saying Libya was prepared to buy around 20 fighter planes and S-300PMU2 air defence systems.

The agency said on Tuesday that Libya also may acquire T-90S tanks, and modernise more than 140 T-72 tanks and other weapons.

The deal was signed after talks with Libyan defence minister, Major General Abu-Bakr Yunis Jabr, earlier this week in Moscow.

It comes days after the Libyan Investment Authority bought into the Hong Kong IPO of UC RUSAL, the world's biggest aluminium producer.-Reuters