By Gennady Fyodorov

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SOCHI, Russia, Oct 2 (Reuters) Palm trees and sunbathing holidaymakers surrounded International Olympic Committee (IOC) chief Jacques Rogge on his first visit to the city that will host the 2014 Winter Olympics.

It was hard, perhaps, to picture biathlon and cross-country skiing taking place here but Rogge, by his own admission, was taken aback by the natural beauty of the area and the warm hospitality of the people.

''I am not used to having this kind of weather at a Winter Olympic city,'' Rogge told Reuters in an interview at a seaside restaurant during his one-day trip to this Black Sea resort last week at the invitation of Russian President Vladimir Putin.

''Still, this is a lovely place and I must say that holding the Winter Games in Sochi is a good idea.'' IOC executive director Gilbert Felli and Alpine skiing great Jean-Claude Killy, who accompanied Rogge on his visit, were equally impressed.

''The mountains are majestic, with a proper set-up you can make a great downhill course, very demanding,'' said Killy, who won all three men's Alpine skiing gold medals on offer at the 1968 Grenoble Olympics.

Regarded by some Olympic experts as rank outsiders, Sochi beat South Korea's Pyeongchang and Austria's Salzburg at the IOC session in Guatemala in July for the right to stage sport's major winter festival.

Many believe that success was largely due to the presence and active lobbying of Putin, who spent two days in the Guatemalan capital meeting dozens of IOC members.

POPULARITY CONTEST Rogge praised Putin's contribution to the Olympic movement.

''We have a very good relationship. He trusts me,'' the Belgian said of Putin, who has a black belt in judo and also enjoys Alpine skiing and horse riding.

''You can see that he definitely loves sport. He is very much interested in it and also you feel that this is a man who is handling the whole strategy of the Olympic Games in Russia.'' Nevertheless, Rogge reiterated the importance of keeping the Olympic movement independent from political lobbying and the IOC plan to review the presence of heads of states at future sessions where host cities are picked.

''We are honoured to have them at our sessions but we don't want it to become a popularity contest between heads of state,'' he said. ''We want to avoid the situation where the big and powerful countries have an edge over the smaller countries.'' Sochi's sunny skies and warm sea breeze made the 65-year-old former Olympic yachtsman reminisce about his own competition days.

''When I was a young athlete I competed a lot against the athletes from the Soviet Union,'' said Rogge, who represented Belgium at three Olympic sailing regattas in Mexico (1968), Munich (1972) and Montreal (1976).

''Not far from here in Sevastopol (in Ukraine's Crimea peninsula) was the training site of the Soviet Olympic sailing team and many of my friends trained there.'' Rogge expressed confidence in Sochi's ability to host a successful Games despite the need to build all the sports facilities and infrastructure from scratch.

''Do I look like someone who is doubtful? Absolutely not. I'm confident, not doubtful, because I know the strength of Russian sport,'' he said.

SECURITY FEARS The Russian government has pledged more than 12 billion dollars to develop sports and tourism in the region.

The IOC chief also felt confident about security despite the constant instability in the volatile Caucasus region, the proximity of Chechnya and the Georgian border.

''Security is a problem for every country in the world,'' he said, listing terror attacks in major cities around the world such as New York, London and Madrid.

''There is no safe haven but I am sure that Russian authorities will do everything to have a secure Games.'' Opinion polls taken before the IOC vote had almost 90 per cent of Sochi's residents in favour of the Olympics but just three months later not everyone is happy.

Real estate prices in Sochi have climbed 30 percent since the vote and some locals say it is now almost impossible for an average worker to buy an apartment.

''We have Moscow prices but our wages are still very low,'' said a local taxi driver. ''It's not just the real estate. Prices on almost everything else, like food and gas, also constantly go up and there's no sign of them slowing down.'' Some residents who own land in the area fear eviction to make way for construction projects.

Putin had to personally intervene, asking local authorities to be sensitive to those who opposed relocation and negotiate with them.

''I'm sure all the problems will be dealt with and everything will be ready and on time,'' said Russian Olympic chief Leonid Tyagachyov.

REUTERS BJR HT028

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