Iran would launch an advanced air- defense system in the next two years, a senior Iranian commander announced on Saturday.

Infrastructures have been solved over bottleneck problems for the development of the missile shield, Bavar (Belief) 373, said Commander of Iran's Khatam al-Anbiya Air Defense Base Brigadier General Farzad Esmaili.

He added that development and construction of the defense system would be completed by the end of Iran's Fifth Five-Year Development Plan (2010-2015).

"We hope to witness a very good system with higher capabilities than the (Russian-developed) S-300 in our air defense system by the end of the development plan," Esmaili was quoted as saying by semi-official Fars news agency.

"The indigenized system will be more powerful than S-300 missile system," he said without elaboration.

Iran and Russia signed a contract for the S-300 system in 2007. In September 2010, former Russian president Dmitry Medvedev signed a decree banning shipments to Iran of the weapons and equipment listed in the UN resolution.

Iran has been suing Russia in the International Court of Arbitration demanding 950 million US dollars of compensation for the contract cancelled by Russia arms export agency Rosoboronexport.