Saudi Arabia has agreed to reschedule Russia's $250 million debt to the kingdom, Interfax quoted Oleg Davydov, Russian deputy prime minister and chief debt negotiator, as saying.


The agreement would mean Mos-cow could defer until 1996 repayment of the first $100 million, Davydov said in the Saudi capital, Riyadh, where Prime Minister Viktor Chernomyrdin ended a two-day visit Sunday. Interfax said the debt was part of a $750 million Saudi credit made to the Soviet Union in 1991.


Reports of the debt deal came as Saudi Arabia and Russia signed their first comprehensive agreement on trade, investment and economic cooperation. The pact, signed by Davydov and Saudi Finance Minister Mohammed Abalkhail, was sealed four years after diplomatic relations between the two countries were established.


Chernomyrdin, who arrived in Kuwait later Sunday, told reporters in Riyadh there was "great potential" to boost industrial cooperation between Russia and Saudi Arabia.


Davydov told RIA news agency the two sides also agreed to set up an Arab investment fund in Russia. No details were available.


RIA said the Russians also proposed that Saudi Arabia consider clearing part of Moscow's debt with arms supplies.


RIA also reported that the chairman of Russia's state committee for the defense industry, Viktor Glukhikh, said that if Saudi Arabia bought Russian arms, 50 percent of the value of contracts should go to pay off Moscow's debt.


Chernomyrdin is traveling to four Gulf nations to bolster ties and seek investments from the oil-rich region, as well as to discuss Iraq. (Reuters, AP)