MOSCOW, February 8 (RIA Novosti) - Former Yukos vice president, Vasily Aleksanyan, diagnosed with AIDS and cancer, has been transferred from jail to hospital, a Russian police officer said on Friday.

"Vasily Aleksanyan was transferred to a hospital specializing in cancer treatment on Friday afternoon under heavy police guard," he said. "He will remain under guard while in hospital."

The decision to move Aleksanyan, 36, who has been accused of embezzlement and money laundering, was made following demands from lawyers and former colleagues that the businessman be released. The prosecution earlier insisted he should undergo medical treatment in jail.

The state penitentiary service confirmed the report: "In line with doctors' recommendations and a report issued by the Moscow health department, Aleksanyan has been transferred to a hospital."

A Moscow court ruled on Wednesday to suspend Aleksanyan's trial due to his worsening health.

Aleksanyan is accused of embezzling about $330 million from former Yukos production unit Tomskneft and shares worth $493 million from other oil companies, and of laundering stolen assets.

The businessman, looking gaunt and tired, said in court on Wednesday that he had not received any medical treatment due to his refusal to assist prosecutors with charges against his former boss Mikhail Khodorkovsky, founder of once Russia's largest independent oil producer, which has been broken up and sold off to pay off back taxes.

Khodorkovsky, 44, declared a hunger strike in his Siberian prison last week, demanding treatment for Aleksanyan. And his former business partner, Platon Lebedev, also in prison for fraud and tax evasion, said he was ready to plead guilty to new charges if it would help Aleksanyan get medical treatment.