The bill has been widely criticized on the grounds that it would be impossible to implement and would contradict international standards on human rights.
Elena Abrosimova, a lawyer for the Charities Aid Foundation Russia, said the veto provided hope that a new law could be drafted that could support the prevention of AIDS more thoroughly than the original bill.
Embassy representatives also said the original draft had been unsatisfactory.
"It's not clear that it's a medical advantage to have that kind of legislation in place," said Ian Hay-Campbell, British Embassy press attach?.
"It would be a disincentive to businesses and students, without any significant benefit in the field of health," he said.
According to Kevin Gardner, director of the AIDS-prevention organization AESOP, a number of changes to the bill still need to be made. As well as abolishing mandatory testing, Gardner wants the law to show government cooperation and support for nongovernmental organizations, and to guarantee medical and social care for those infected with HIV, the virus which causes AIDS.
Leonid Kogan, a senior adviser to the State Duma Health Care Committee, said Wednesday he had received a statement from President Yeltsin, disclosing the veto of the bill.
Reuters reported Thursday that another consultant to the committee, Boris Maksimov, had also reported that Yeltsin would not sign the bill but would send it back to parliament.
Bella Denisenko, head of the Duma Health Care Committee, was scheduled to address parliament Thrusday on Yeltsin's veto but her speech was postponed until the new session in January.
The veto still has not been confirmed by the president's press office.
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