(Repeats story from Sunday)
* Some politicians see Sweden as a "great moral power"
* Others say security and exports must take priority
* Wallstrom draws fire as Saudi defence deal scrapped
* But row may reflect squabbling in coalition government
By Alistair Scrutton and Johan Ahlander
STOCKHOLM, March 15 (Reuters) - In a few months, Sweden's minority government has managed to antagonise both Israel and the Arab world, while also angering business leaders at home as Foreign Minister Margot Wallstrom steadfastly pursues human rights and feminism.
Wallstrom's agenda, and the criticism it has drawn, has exposed a struggle over Sweden's identity and whether it should become what some politicians call a "moral great power", or prioritise security and an export-led economy.
After Sweden cancelled a defence cooperation accord with Saudi Arabia last week over rights concerns, the Arab League condemned Wallstrom and blocked her from giving a speech in Cairo. Saudi Arabia recalled its ambassador from Stockholm; hundreds of millions of dollars in business are threatened.
Wallstrom, a former EU commissioner, promised a "feminist" foreign policy when her Social Democrats formed the coalition government last October. Since then, she has described the flogging of a liberal Saudi blogger as "medieval", winning praise from many commentators for standing up to the kingdom.
"I won't back down over my statements on women's rights, democracy and that one shouldn't flog bloggers," Wallstrom said, referring to sentencing of Raif Badawi to 1,000 lashes. "I have nothing to be ashamed of."
But Sweden is the world's 12th biggest arms exporter. Its Triple-A rated economy depends on brand exports from IKEA to H&M . With Russia also testing Sweden's air and submarine defences, this may be the wrong time to put human rights front and centre in foreign policy, her critics say.
Sweden has a history of neutrality. But under the previous centre-right government it forged closer links with NATO, participating in military missions in Afghanistan and Libya, something Wallstrom has promised to tone down.
The Saudi defence accord had helped Swedish firms to make 4.8 billion crowns ($567 million) in 2011-2014. Signed in 2005, it had been due for renewal in May.
"Much of what Sweden exports of high technology requires the various types of long-term commitments," Wallstrom's centre-right predecessor Carl Bildt wrote in his blog. "There is a real risk ... (the cancellation) will hit Swedish interests, not only in Saudi Arabia itself."
DIPLOMATIC MISCALCULATIONS
But the Saudi row may not have been Wallstrom's doing, and has brought accusations of diplomatic miscalculations by the squabbling coalition government.