March 14, 2011 / 9:46 AM / 9 years ago

UPDATE 2-Russia bans Gaddafi, will consider no-fly zone

* Medvedev signs decree to ban Gaddafi, family from Russia

* Russia shows it is ready to talk Libya no-fly zone-analyst

* Moscow stands to lose billions in contracts

(Recasts, adds context, no-fly zone, analyst comments)

By Alexei Anishchuk

MOSCOW, March 14 (Reuters) - President Dmitry Medvedev has barred Muammar Gaddafi and his family from Russia, the Kremlin said on Monday, in a move that brings Moscow closer in line with Western policy on the Libyan leader.

The Kremlin said a decree on March 10 would also prohibit Gaddafi, who has launched a counteroffensive against rebels in control of much of eastern Libya, and his family from conducting financial operations in Russia.

With the unrest in Libya halting billions of dollars in Russian arms, energy and railway deals, political analysts said the Kremlin wanted to make sure it is will be able to deal with any new leadership in Libya.

Fyodor Lukyanov, editor of Russia in Global Affairs journal, said the ban against Gaddafi and his family suggested Moscow could back a no-fly zone over Libya despite ruling out military intervention as “unacceptable”.

France and Britain have been leading calls in the United Nations for a no-fly zone, which Arab League leaders have also backed.

Russia “traditionally opposes any foreign military intervention”, Lukyanov said. “But as global politics is driven by all kinds of deals, it is possible that Russia may turn around its position ... if it is offered something in exchange.”

Foreign Minister Sergei Lavrov said earlier on Monday that Russia would consider any proposal that comes before the Security Council. But he suggested Moscow would want limits on a no-fly zone. [nLDE72D0W6]

“We need to understand specifically what the Arab states want to see,” Lavrov told a news conference.

He said Arab League leaders had indicated a no-fly zone could be imposed “with some restrictions, primarily with full respect for the sovereignty of Libya and without the use of weaponry to suppress air-defence facilities”.

Moscow appears likely to use its U.N. Security Council seat and power of veto to scale down the no-fly zone — as Russia and China have done with successive sanctions resolutions against Iran over its nuclear programme.

NO-FLY ZONE

Political analysts said Russia should be slower in taking any gamble.

“It would have been more logical to take a time out and see how it goes,” said Yevgeny Minchenko, director of the International Institute of Policy Analysis in Moscow.

Russia has said it will lose $4 billion in weapons deals — some sealed, some in the making — because of the unrest in Libya after backing a U.N. Security Council resolution imposing an arms embargo on Gaddafi’s government.

Russian companies Gazprom (GAZP.MM), Gazprom Neft (SIBN.MM) and Tatneft TATN3.MM have invested hundreds of millions of dollars in oil and gas exploration in Libya.

Russian Railways signed a 2.2 billion euro ($3.07 billion) contract in 2008 to build a high-speed railway from Sirte to Benghazi on Libya’s Mediterranean coast, and Russia has evacuated hundreds of workers building the line. (editing by Elizabeth Piper)

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