DAMASCUS (Reuters) - Russia may help build a nuclear power plant in Syria, Russia’s energy minister said on Tuesday, a step that could upset the West due to unresolved allegations Damascus tried to construct a potential nuclear weapons facility in secret.

In 2007, Israel bombed to rubble what Washington said was a nascent, plutonium-producing nuclear reactor in Syria’s desert and a U.N. nuclear watchdog probe to determine what the target was has stalled due to Syrian non-cooperation, diplomats say.

On the first state visit to Syria by a Kremlin chief since the Bolshevik Revolution, Russian President Dmitry Medvedev played up prospects for nuclear power cooperation and said Washington should work harder for peace in the Middle East.

“Cooperation on atomic energy could get a second wind,” Medvedev said at a news conference with Syrian President Bashar al-Assad after their talks.

Assad said he and Medvedev “talked about oil and gas cooperation, as well as constructing conventional or nuclear powered electricity stations.”

Asked whether Russia would build an atomic power plant in Syria, Russian Energy Minister Sergei Shmatko told Reuters: “We are studying this question.”

The International Atomic Energy Agency has been investigating Syria for two years over what it says was a complex that resembled a nuclear reactor before it was bombed to rubble by Israeli warplanes in September 2007.

Syria has strongly denied U.S. intelligence that the complex was a North Korean-designed reactor geared to making plutonium for atomic bombs, saying it was merely a conventional military building.

But an IAEA report in March said uranium traces found in a 2008 visit to the area by U.N. inspectors pointed to nuclear-related activity on the ground, but Damascus was denying further IAEA access needed to draw conclusions.

SYRIAN NUCLEAR TRANSPARENCY SOUGHT

The United States, Israel’s chief ally, and several European countries have demanded that Syria cooperate fully with the IAEA inquiry, saying the issue will not go away even as Damascus improves its relations with the West.

The Arab nation has been plagued for years with electricity shortages, with power generation falling one-third short of demand and the population expanding at 2.5 percent a year.

Shmatko said that cooperation with Russia on a possible nuclear plant would require Damascus to abide by the 1970 Non-Proliferation Treaty, which prohibits signatories including Syria without nuclear weaponry from trying to acquire them.

He also suggested Russia might build more nuclear power reactors in Iran beyond the one it plans to switch on this year near the city of Bushehr despite likely U.S. disapproval.

Tehran is under U.N. sanctions for refusing to rein in a secretive uranium enrichment programme.

“We are in favor of continuing cooperation with Iran in the energy sphere to the full extent, including in building light-water reactors,” Shmatko told journalists.

Russia says all nations have the right to peaceful nuclear power programmes and is aggressively seeking contracts abroad to build atomic power plants.

But Medvedev, who has indicated Russia could support new U.N. Security Council sanctions against Iran over its nuclear programme, called for “constructive cooperation with the international community on Iran’s part.”

The United States and some European countries believe Iran’s professed civilian nuclear energy programme is a front for an effort to develop atomic weapons. Iran denies it.

Moscow backed Syria through the Arab-Israeli conflict, and the Kremlin is seeking to reinvigorate ties in the Middle East nations. It forgave most of Syria’s multi-billion dollar debt.

Israel has also opposed Russian arms sales to Syria, which was the fourth largest purchaser of Russian weaponry last year.

Russia has also improved ties with Israel and tried to increase its clout to advance the Middle East peace process.

Israel is widely believed to be the only state in the Middle East to have nuclear weapons, although it has long neither confirmed nor denied such ability.

Medvedev repeated Russia’s proposal for a Middle East peace conference in Moscow, but he suggested the United States would have to do more if peace efforts are to make headway.

“I agree with my colleague that the American side could take a more active position,” Medvedev said.