MOSCOW. June 5: The Russian government is encouraging businesses to pursue commercial deals with Iraq and take advantage of the partial lifting of the UN embargo on Iraqi oil exports, an officials said Tuesday, reports AP.

Under an agreement signed May 20 with the United Nations. Iraq is permitted limited oil sales to buy food and medicine for Iraqis who have suffered under nearly six years of sanctions.

"This means that Russian companies can buy and transport Iraqi oil along with companies from other countries." Foreign Ministry spokesman Mikhail Demurin said at a news conference.

Russian firms must operate within the guidelines of the UN agreement and submit any contracts to the Foreign Ministry and the United Nations, he said, according to the Interfax news agency.

Iraq, with the world's second-largest oil supplies behind Saudi Arabia, has been shut out of the market by UN sanctions since it invaded'Kuwait in August 1990.

Russia has supported easing the sanctions against Baghdad.