EU, Russia Sign Visa Accord But Energy Stand-Off Still Looms

As part of the deal, Russia will also undertake to readmit illegal immigrants -- both Russian and third-country nationals -- who enter the European Union from Russian territory.

"They will make visas simpler, easier to obtain and also step up the fight against illegal immigration," Benita Ferrero-Waldner, the EU's commissioner for external relations, said

EU leaders met with Russian President Vladimir Putin hoping to obtain guarantees on Europe's energy security and join forces with Moscow to keep Iran's nuclear ambitions in check.

"A strong energy partnership is in both our interests. This requires security and predictability on both sides," Ferrero-Waldner said Thursday ahead of the summit.

Putin was hosting Ferrero-Waldner, European Commission President Jose Manuel Barroso and Austrian Chancellor Wolfgang Schüssel, current holder of the EU presidency, in Sochi on the palm-fringed Black Sea coast of southwestern Russia.

At the start of the one-day summit, Putin said Russia was taking measures to "strengthen the energy security of the European continent" with the aim of "improving the quality of life of Europeans."

EU, Russia still divided over energy issues

But Russia, which has the biggest gas reserves in the world and accounts for 26 percent of EU gas supplies, and Europe are still divided over access to each other's energy markets and accuse each other of politicizing the issue.

However both sides tried to put a diplomatuic face on the fact that the really hard bargaining had yet to be addressed at the summit.

"We believe we can send from this summit good, positive, constructive messages regarding energy (and) about the need for a transparent and reciprocal cooperation in terms of energy,"European Commission President Jose Manuel Barroso said.

President Putin was even more vague. "Russia sees the European Union as its key international partner," he said, adding construction of the north European pipeline was one example of its commitment to ensure the energy security of the continent.

The energy issue has soured East-West relations much of this year, ever since Russian gas giant Gazprom briefly switched off the taps to Ukraine during a price dispute in January, hitting supplies further west in Europe.

The European Union now wants energy issues to be included in a new EU-Russia partnership agreement from next year to replace a deal signed in 1996.

Initial talks on a new document are set to start at the summit.

"The time has come to agree on the foundation stones for a new agreement to reflect the full range of cooperation," Barroso said in a written statement this week.

Common ground on Iran

Even as differences remain over energy, Brussels and Moscow stressed common ground on stopping a determined Iran from pushing ahead with uranium enrichment -- seen in the West as part of a secret plan to build a nuclear bomb.

"We will think how we can find a way out of this complex situation together," Sergei Yastrzhembsky, Putin's envoy to the European Union, told reporters ahead of talks.

Ferrero-Waldner recognized Russia was "a very constructive player" in the diplomatic stand-off over Iran and stressed "synergy" between Russia and the European Union.

"At the same time, we also have to have credible alternatives that are still being discussed in the Security Council," in case Iran rejects offers aimed at coaxing it into stopping sensitive nuclear work, Ferrero-Waldner said.

Putin expected to steer clear of awkward democracy questions

Analysts say the meeting is a chance for Putin to smoothen rough diplomatic waters ahead of the G8 summit he hosts in July, amid US criticism about the state of democracy in Russia and widespread Western fears about Moscow's reliability as an energy supplier.

"For President Putin it will be a sort of dress rehearsal for the Group of Eight," Kommersant daily wrote Thursday. "The Russian president will talk with EU leaders about energy security and try to stay away from the democracy subject."

He may find avoiding this embarrassing issue more difficult than he thought. The European delegation made it clear that the issue of democracy in Russia was one that they wished to address in depth in the future.

"We do think that Russia has a special responsibility to take forward questions like human rights, rule of law, good governance -- all these basic values we in the European Union hold up," Ferrero-Waldner told reporters. "So we shall certainly mention that in our discussions."

Russian and EU officials meeting in Sochi also agreed in principle on a 20-million euro aid program for the troubled North Caucasus region that includes Chechnya, Ferrero-Waldner said.