After blocking the sale of 400 bombs to Saudi Arabia, involved in the Yemen conflict, Spain now appears to be back-pedalling to maintain other lucrative contracts with the oil giant, observers say.

In so doing, Madrid will be hoping to avoid a row like the one between Riyadh and Canada, sparked by Ottawa's criticism of Saudi Arabia's human rights record.

Ties between long-time allies Madrid and Riyadh were put to the test last week when Spain's defence ministry said it was cancelling a 2015 deal to sell laser-guided bombs to Saudi Arabia.

The ministry said it planned to return the Euros 9.2 million (US$10.7 million) already paid by the Saudis, leading a coalition fighting rebels in Yemen, where nearly 10,000 people have been killed.

Then reports emerged that Riyadh was thinking of cancelling a Euros 1.8-billion contract with Spain's state company Navantia to build five warships - a deal that involves 6,000 jobs in a country with one of Europe's highest unemployment rates.

On Monday, Spain's Socialist Defence Minister Margarita Robles opened the door for the bomb deal to go ahead as planned.

She told a parliamentary commission the contract would be examined by Spain and Saudi Arabia as per an agreement that stipulates disputes "will be resolved amicably".

We are "two partner countries that have signed a contract", she said.

Robles insisted the warship deal was in no danger as it was "not linked to any other contract."

Spain will seek to avoid a diplomatic crisis like the one that erupted between Riyadh and Ottawa last month, prompting the Saudi government to expel Canada's ambassador, recall its own envoy and freeze all new trade and investments.

Source: United Nations

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