Russia sees more steps to mend ties with Georgia

MOSCOW, Jan 19 (Reuters) Russia's decision to return its ambassador to Georgia, recalled amid a spying row in September, may be followed by new measures to improve ties with the ex-Soviet neighbour, a Kremlin spokesman said today.

''New steps can be expected, although it is a two-way process,'' Dmitry Peskov said. ''We see certain steps that evoke cautious optimism.'' Moscow suspended trade and transport links with the Caucaus state after it briefly detained two Russian officers on spying charges. Georgia's pro-Western course and increase in defence spending have also angered Russia.

Yesterday, President Vladimir Putin summoned ambassador Vyacheslav Kovalenko to the Kremlin and ordered him to return to Tbilisi.

''This was an important step from both symbolic and diplomatic points of view because the presence of the ambassador will give an impetus to the further normalisation of relations,'' Peskov said.

Jemal Inaishvili, deputy speaker of the Georgian parliament, welcomed the return of the ambassador.

''The fact that the Russian president himself met the ambassador to tell him to return was an important signal, which indicated Moscow's intention to rebuild relations,'' he told Reuters.

The respected Kommersant newspaper said Putin's Security Council decided last week to lift all sanctions.

''I am not aware of this meeting, but Putin has said he and Georgian President Mikhail Saakashvili had agreed to take certain steps to normalise ties,'' Peskov said.

Moscow's relations with Tbilisi, soured by Russian support of Georgia's breakaway regions of Abkhazia and South Ossetia, have reached their lowest point after pro-Western Saakashvili came to power after a peaceful revolution in 2004.

Apart from sanctions imposed in September, Russia had also banned imports of Georgia's wine and mineral water and doubled Tbilisi's gas bill to 235 dollars for 1,000 cubic metres in 2007.

The sanctions were formally introduced for technical reasons but observers said they were meant to punish Saakashvili for his drive to end Georgia's traditional reliance on Russia and bring it closer to NATO and the European Union.

The pressure on Georgia alongside similar actions by Russia towards other ex-Soviet neighbours has damaged Moscow's reputation in the West, which suspects the Kremlin of trying to revive Soviet-era imperialism.

Georgia has dealt with the Russian pressure by diverting its exports to other countries and reaching a deal with neighbour Azerbaijan on additional gas supplies.

''We showed the world that a country on which a blockade was imposed continues to grow at the same rate,'' Georgian economic reform minister Kakha Bendukidze told Reuters.

Reuters PB VV1702