MOSCOW (AP) _ Officials of the former KGB teamed up with U.S. diplomats to seize 1 million counterfeit dollars, but at least 2 million more are still circulating in southern Europe, Russian officials said today.

Interior Ministry officials have said they are intercepting rising numbers of bogus banknotes - especially 100-dollar bills - as forgers prey on economic disorder and citizens' unfamiliarity with foreign money.

Russia and the other former Soviet republics have almost no electronic banking systems, so Russians and foreigners often carry large amounts of cash - rubles or dollars - to pay their bills.

''The criminal situation in Russia concerning hard currency cash supplies is extremely unfavorable and can be compared to a vacuum cleaner,'' said Alexander Perelygin, deputy head of Russia's Security Ministry, formerly part of the KGB.

Four Italians, one Latvian, one Ukrainian, one Russian and one individual with no citizenship were caught on Dec. 6 in Moscow as part of a sting operation led by Security Ministry officials, Perelygin said at a news conference.

The counterfeit operation took place in the Hotel Leningradskaya, a Stalin- era skyscraper that houses a hard currency casino and has a reputation for gangland-style brawls.

Authorities agreed to pay the counterfeiters half a million real dollars for 1 million bogus dollars, which were manufactured abroad in secret printing plants, Perelygin said. He did not specify where.

Counterfeit money totaling $2 million was distributed in southern Europe, while tens of thousands were sent to Ukraine and probably to the former Soviet republic of Kazakhstan, Perelygin said. More fake notes were intended for further distribution throughout the former Soviet republics.

The newspaper Literaturnaya Gazeta reported this week that the 1 million counterfeit dollars confiscated were part of a total package of 11 million dollars in bogus bills manufactured by the same gang.

''We established the routes the money got here, but we still have to figure out how the criminals managed to import such great sums to Russia,'' Perelygin said.

Russian, Ukrainian, Italian and American investigators are working on the case, he said.

John Ohta, a spokesman for the U.S. Embassy, confirmed that U.S. diplomats helped the Russians learn to distinguish between real and fake American currency.