The US has raised concern over a decision by its Gulf ally Bahrain to sign an investment cooperation deal with Russia at a time when US and European governments are imposing economic sanctions on Moscow over the Ukraine crisis, an official said.

"With Russia continuing its efforts to destabilise Ukraine, this is not the time for any country to conduct business as usual with Russia," a US State Department official said.

"We have raised these concerns with the Bahraini government."

In a statement on Tuesday, the Russian Direct Investment Fund (RDIF) said it had signed a memorandum of understanding with Bahraini sovereign wealth fund Mumtalakat to identify and work together on investment opportunities in their countries.

Mumtalakat chief executive Mahmood Al-Kooheji will join the RDIF's international advisory board, helping to formulate its strategic direction, the statement said.

The Bahraini fund is one of the smaller sovereign funds in the Gulf, with $7.1 billion of assets as of last September. The RDIF is a $10 billion fund created by Russia's government to make equity investments, mainly in the Russian economy.

The official Bahraini News Agency reported the deal between the funds, signed after a visit to Moscow by HRH Crown Prince Salman Bin Hamad Al-Khalifa.

In addition, Bahrain's government has revised visa policies to make it easier for Russian citizens to travel to the kingdom on business, while Bahrain's national carrier Gulf Air will open a direct route between Moscow and Manama, the agency said.

However, Bahrain's Foreign Minister Shaikh Khalid bin Ahmed bin Mohammed Al-Khalifa, commending the Bahrain-Russia bilateral relations, said: “Multi-faceted political relations have been growing steadily over the past 25 years”.

He was speaking on the sidelines of the meeting between Prince Salman and Russian President Vladimir Putin.

In a statement, he stressed the crucial importance of the meeting which focused on political relations in total frankness and clarity.

“The meeting between HRH the Crown Prince and the Russian President has laid another milestone for relations bonding the two friendly countries”, he said, stressing Bahrain’s keen interest in pursuing consultation regarding all regional issues. - Reuters and TradeArabia News Service