Tomsk, Russia, Apr 27: German Chancellor Angela Merkel and Russian President Vladimir Putin meet in the heart of Siberia today to discuss the security of gas supply to Europe and to try to agree on a strategy for dealing with Iran.
''Our first discussions were unusually intense,'' Putin told reporters last evening after a meeting with Merkel on economic and energy ties between Berlin and Moscow, the focus of Merkel's two-day visit to Tomsk in western Siberia.
Merkel said they did not discuss foreign policy issues, though members of Germany's large delegation of 10 ministers and 20 representatives from top German firms said the two leaders tackled those issues at a dinner meeting afterwards.
The main foreign policy issue discussed over dinner was Iran, which has only one day left to comply with a UN Security Council deadline to freeze its uranium enrichment programme and provide the International Atomic Energy Agency (IAEA) with answers about its past nuclear activities.
The West believes Tehran is secretly producing atomic weapons. Iran says its programme is aimed solely at generating electricity but refuses to abandon nuclear enrichment activities that could enable it to produce fuel for atomic weapons.
Putin has made it clear that the veto-wielding permanent UN Security Council members Russia and China oppose the idea of economic sanctions against Iran.
But Merkel hopes to persuade Putin that if Russian attempts to get Iran to compromise and suspend its uranium enrichment programme fail, Moscow would not stand in the way of sanctions intended to force a peaceful resolution of the crisis.
The high point of today will be a signing ceremony for several deals between German and Russian companies followed by a news conference with both Merkel and Putin.
Russian natural gas giant Gazprom is building a gas pipeline in a joint venture with German utility E.ON and chemicals firm BASF that will ship Siberian gas directly to Germany starting in 2010.
To fill the pipeline, Gazprom has struck a deal with BASF to develop the massive Yuzhno-Russkoye gas field near Tomsk. E.ON is also expected to participate in developing the field, though sources in the delegation said E.ON was still trying to finalise the terms of a deal with Gazprom.
German railway firm Deutsche Bahn is also expected to sign an agreement on a joint venture with Russian Railways.
This is Merkel's second visit to Russia since taking over from Putin's close friend Gerhard Schroeder in November.
Merkel, a fluent Russian speaker and the first chancellor from Germany's formerly-communist east, has made it clear that ties with Russia are one of her top priorities.
The public inking of the Gazprom deals in the presence of Merkel and Putin appears intended to ease fears in the European Union that Gazprom cannot be trusted.
Worries about EU dependence on Gazprom have been steadily increasing since the firm cut off supplies to Ukraine during a dispute over how much Kiev should pay for its gas.
Last week Gazprom Chief Executive Alexei Miller warned that his firm could shift gas away from Europe to Asian and US markets if it was prevented from acquiring businesses in the EU.
Critics say Miller's comments mean the Kremlin is using its energy power as a political weapon, but Gazprom dismissed the criticism, saying the media had distorted what he said.