NICOSIA, Cyprus -- Amid growing concern over Tehran's nuclear ambitions, Iran and Russia have signed an $800 million deal to complete construction of a nuclear facility halted by the 1979 Islamic revolution.


Although Tehran television said the agreement is devoted to peaceful power generation, it coincided with estimates that Iran may be as little as seven years away from nuclear arms possession.


U.S. Defense Secretary William Perry warned during a visit Sunday to Israel that unless the spread of atomic weapons is checked the world will face nuclear blackmail by rogue nations or terrorists. He said the Clinton administration is "very much concerned about the potential that Iran might become a nuclear power."


The deal was condemned by Iran's largest opposition group in exile, the Baghdad-based Mujahedin Khalq, or People's Holy Warriors.


"Such undertakings only assist the religious-terrorist dictatorship in Iran to pursue expansionist goals to acquire nuclear weaponry," the group's spokesman, Ali Safavi, said Monday.


Sunday's agreement was signed by Russian Nuclear Power Minister Viktor Mikhailov and the head of Iran's nuclear agency, Reza Amrollahi, according to the television report, monitored by the British Broadcasting Corp.


The report said the deal would enable Iran "to make proper and peaceful use of nuclear energy and to provide part of the country's required electricity."


It added that the Russians would "complete and open Bushehr nuclear power station with the participation and cooperation of Iranian experts within the next four years."


The news came as Perry said in Israel on Monday that he believed Iran could build a nuclear bomb within seven to 15 years.


Early reports on the deal indicated the agreement covered only one of two unfinished 1,300 megawatt reactors in Bushehr, reportedly a major center for nuclear research on the Gulf coast about 700 kilometers south of Tehran.


The latest television report also quoted Amrollahi saying the capacity of the first phase of the power station would be 1,000 megawatts.


Both reactors were started by Germany's Siemens/Kraftwerke Union before the Islamic revolution brought Moslem fundamentalist rule to Iran.


Germany has since refused export permits for vital equipment. Another setback was Iraqi bombing raids in the 1980-88 Iran-Iraq war.


Moscow agreed in late 1993 to rebuild the facility and appears to be honoring the commitment despite U.S. pressure against it.


Itar-Tass said over the weekend that the long delay in implementing the agreement was due to "a number of technical and financial problems."


Last September, the CIA warned that Russia was a key source of nuclear technology and expertise for Iran's drive to become a nuclear power.