The Serbian government on Wednesday approved a deal enabling the republic's main arms factory to export weapons to Armenia, following a green light from Russia.
"The ministry of international economic relations issued a license to the Zastava Weapons factory for exports of arms to Armenia," the government said in a statement.
The license was given after a weeks-long dispute between the factory and the government over the $2.5 million (1.9-million-euros) deal to sell guns and rifles to Armenia. Serbia's foreign ministry initially refused to agree to the exports, quoting a possible dispute with Russia over its tense relations with Armenia. Following a protest by the Serbian manufacturer, President Boris Tadic had held talks with Russian diplomats and secured a green light.
Serbia considers Russia a traditional ally and relies on Moscow's support in solving the status issue of the disputed UN-run province of Kosovo, later this year.
Zastava, based in the central Serbian city of Kragujevac, some 120 kilometers (70 miles) south from Belgrade, is a state-owned factory and needs a government clearance for exports deals.