The Romanian defence ministry has admitted that a Romanian arms firm signed a contract in 1995 to supply missile eqipment to Iraq.

A defence ministry statement said the state-owned firm Aerofina signed the contract for short-range missile components with a Jordanian company acting as an intermediary.

A defence ministry spokesman said it was not clear whether any missile parts had been delivered, but an investigation was underway.

The Romanian defence ministry, which earlier denied any arms dealings with Iraq, said two other arms companies Romtehnica and Giarahad also held negotiations.

But it said all contacts and deals were halted in December 1996.