Russia and Germany said Saturday at the end of two days of talks that they plan to work together on sanctions against Iran over its nuclear research, DPA reported.
The talks came just one week after Moscow's patience appeared to be waning amid an angry spat that culminated in a Kremlin spokesman accusing Iranian leader Mahmoud Ahmadinejad of "rabble-rousing."
But Russian President Dmitry Medvedev and German Chancellor Angela Merkel did not spell out what the next step on sanctions would be.
Medvedev still seemed cautious, urging unity in any world response and saying he still hoped sanctions would not be needed.
"Either we all stand together or we drift off in different directions, which would be the wrong thing to do," he said.
The veto-yielding members of the United Nations Security Council and Germany have spent years debating how to act on suspicions that Iran is making nuclear bombs.
"The time has now come where such sanctions must be imposed if nothing changes qualitatively," Merkel warned at Meseberg, the government guesthouse outside Berlin where she held talks with Medvedev on Friday evening and Saturday morning.
"This is a joint position that includes not just the European Union, the United States and Russia, but China as well," she added. "This is a major, significant step that the international community is taking."
She said she expected the Security Council to act in the near future.
Merkel also politely acknowledged proposals by Russia for closer security ties with the European Union. The West has generally rebuffed those calls in the past, perceiving them as an attempt to drive a wedge into NATO.
She said she envisaged upgrading EU-Russia security discussions about troublespots from ambassador to minister level, adding that one example she had in mind would be the ongoing crisis in Transdniestr, a territory that has broken away from Moldova.
Neither leader mentioned human rights issues at their joint news conference. But Medvedev lobbied on behalf of Russian citizens who cannot travel visa-free to the European Union, instead having to stand in line at consulates to obtain advance permission.
"I can understand the concerns of the people in Russia," said Merkel, adding that she would ask key ministers to tell Moscow what the issue was and which conditions applied for visa-free travel.
The euro crisis of recent weeks also took up a significant part of the talks, Merkel said. Medvedev noted that a sizeable part of Russia's foreign exchange reserves were held in euros.
"We agreed here that the stability of the euro is a core duty for stable development and sustainable growth," Merkel said.
Medvedev spent the night at the heavily guarded guesthouse, after a welcome dinner and evening walk in its gardens with Merkel.
One Russian adviser who insisted he not be named implied that the meeting was not of top importance, as he joked that it was nice break for Medvedev.
"The agenda was two meals and one stroll," he noted.
For Merkel, the talks in the sunny countryside came after a week of crises in Berlin, which saw the resignation of the German president she had nominated in 2004, mounting financial problems and a deadlock among the parties in her coalition over health policy.