Russia, Georgia leaders talk but no agreement

(Reuters) - Russian President Vladimir Putin and his Georgian counterpart said they had failed to settle disputes that have poisoned relations between the ex-Soviet neighbors.

Georgian President Mikhail Saakashvili had asked to see Putin for their first one-to-one talks since 2004. Relations have nosedived since Saakashvili, a close U.S. ally, came to power promising to move his country closer to the West, reports Trend.

Both leaders said after their 90 minutes of talks that they were anxious to improve trust and communication. The atmosphere between them, though, appeared strained as they spoke to reporters.

"The discussion was helpful. As far as mutual recriminations and criticisms are concerned, these arise because we do not have the right level of contacts," Putin told reporters.

Saakashvili, standing next to his Russian counterpart, was more critical saying "most of the problems (between us) remain unresolved."

"Unfortunately, for the time being we have more questions than answers," Saakashvili told reporters after the meeting in Putin's hometown of St Petersburg that began late on Tuesday.

Saakashvili said Russia was "annexing" the Georgian breakaway territories of South Ossetia and Abkhazia by propping up the separatist administrations.

Moscow and Tbilisi have been exchanging angry rhetoric for months. Georgia accuses Russia of trying to weaken it as punishment for its attempts to move out of Moscow's orbit and seek membership of NATO and the European Union.

Russia says Tbilisi is being "hysterical" and has whipped up a conflict with Moscow to hide its own domestic failures.

Citing public health concerns, Russia has banned imports of Georgian wines, mineral water and fruit -- important earners for the small, mountainous country.

STRAINED ATMOSPHERE

Georgia is one of the issues that has pitted Washington and Moscow against each other.

President George W. Bush called Georgia a "beacon of democracy" on a visit last year and his administration has made clear it does not like what it sees as Kremlin bullying of its ally in the Caucasus mountains.

The tension could flare up when Putin hosts heads of state from the Group of Eight rich nations in St Petersburg next month.

Washington says it wants a peace plan for Georgia's breakaway regions on the agenda but Moscow has resisted the idea.

Abkhazia and South Ossetia broke away from Tbilisi in fighting in the 1990s. Moscow has since given many residents Russian passports, it has peacekeeping troops there and helps supplement the regions' budgets.

The leaders differed sharply on the future of the breakaway regions.

"The reality is that the annexation of the territories of our country is under way. ... We will never agree to anyone taking away our territory," said Saakashvili.

"Whatever our starting point, we should ask the opinion of the people," said Putin, in a nod to Moscow's view that the separatists' desire for self-determination should be respected.

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