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Russian President Vladimir Putin on Sunday said that Russia is open to dialogue with the European Union (EU) over the issue of energy supplies based on the mutual respect of individual interests, and will try to reduce its dependency on transit countries for fuel deliveries.

Putin hosted German Chancellor Angela Merkel in his summer residence in the Black Sea resort of Sochi, three weeks after Germany took over the presidency of the Group of Eight (G8) from Russia. Germany also holds the current EU presidency.

Speaking at a joint news conference with Merkel after their talks, Putin said, "We are open to constructive work in the framework of the energy dialogue with the EU," and expect partners to stick to the principles of equality and mutual respect of individual interests.

"There should be no doubts that Russia was and will remain in the future a reliable fuel supplier," Putin was quoted by the Interfax news agency as saying.

Relations between the EU and Russia have soured as Russia abruptly halted its supply of energy resources to neighbors over pricing disputes.

Earlier this month, Russia briefly turned off a pipeline that delivers oil to Europe in a row with Belarus, which serves as a transit point for Russian oil exports.

The oil disruption affected Poland, Germany, Hungary, the Czech Republic and Slovakia, and raised concerns in the EU, with Merkel earlier calling the shutoff "unacceptable."

Merkel told the news conference that "not only do I understand but I accept that Russia wants to have market prices with its partners, Ukraine and Belarus, when it comes to oil and gas sales."

At the same time, she said, Germany stands for the reliability of Russian fuel deliveries to Europe.

"We understand perfectly well that there is strategic dependence here in a good sense of the word," she said.

Russia provides about a quarter of the oil and gas consumed in the EU. The 27-nation bloc has been keen to formulate new principles of energy cooperation with Russia but has so far failed to persuade Moscow to commit to the Energy Charter, which would require it to open its export pipeline network and other energy assets to foreign investors.

"We will be building relations with all partners -- transit nations and consumers of hydrocarbons -- on an equal, understandable and transparent basis," Putin said.

Putin pledged Russia will seek new routes for energy exports to reduce its dependence on transit countries for fuel deliveries.

"Given changes in the geopolitical situation, we will be most actively developing our own transport network to have a chance to directly deliver our raw material to key consumers," he said.

Middle east, Kosovo

Although Putin did not give much ground on energy, he offered his backing for Germany's proposal for the Quartet of international mediators to meet soon in a bid to inject new impetus to the Middle East peace process.

"We paid special attention to the Middle East settlement based on the roadmap recognized by all the sides," Putin said.

Germany has made the revival of the Middle East peace process one of its priorities during its EU presidency and has pledged to focus on reactivating peace efforts by the Quartet, which groups the EU, the United States, Russia and the United Nations.

US Secretary of State Condoleezza Rice said on Wednesday in Berlin that the Quartet was likely to meet early next month in Washington.

Putin said that the approaches of Russia and Germany to major international issues are close. The talks with Merkel in Sochi "confirmed the proximity of positions on key items on the international agenda," he said.

Turning to Kosovo, Putin said it is impermissible to impose a decision concerning the status of Kosovo from abroad. "A long-term solution of the problem can be reached only if it is acceptable for both Belgrade and Pristina."

(Xinhua News Agency January 22, 2007)