Russia and the European Union will try to mend frayed relations by discussing a new partnership pact at a summit on Friday, but a trade dispute could sour the atmosphere.
EU leaders flew into the Siberian oil city of Khanty-Mansiysk on Thursday hoping new Russian President Dmitry Medvedev, hosting his first EU-Russia summit, would usher in an era of more cordial relations between Moscow and Brussels.
The start of talks on the pact was held up for 18 months because EU members in Eastern Europe, in dispute with Moscow over energy and trade, vetoed the bloc's negotiating mandate.
With those obstacles now removed, EU leaders including European Commission President Jose Manuel Barroso were planning to formally launch the talks on a pact that is designed to provide a blueprint for long-term relations.
Europe relies on Russia to supply a quarter of its energy needs while the EU is Russia's biggest trading partner.
Medvedev and the EU leaders met at an informal dinner on Thursday night, and a source in the EU delegation said: "It was a general get-to-know-you meeting."
"The (EU) guests showed a considerable interest in the idea of working out a new collective security pact for Europe," said a source in the Russian delegation, referring to Medvedev's proposal for a broader regional security body to replace NATO.
But a new row ignited on Thursday, with Finland saying it was considering retaliation for Russia increasing the duties it levies on timber exports. The tariffs have hurt paper producers in Scandinavia who import their raw materials from Russia.
TENSE AFFAIR
The last EU summit on Russian soil, hosted about a year ago by then President Vladimir Putin, was a tense affair after German Chancellor Angela Merkel chided Russian police for interfering in an opposition protest rally.
This time, the mood will be more courteous though without any major breakthroughs, say diplomats.
One EU diplomat said Brussels had been cautiously impressed by a series of moderate speeches by Medvedev.
"It is a new president in a new position with his ambitions and we need to find out how he wants to implement these policy aims," said the diplomat, referring to promises by Medvedev to fight corruption and enhance the rule of law.
Medvedev told Reuters in an interview earlier this week he wanted to seal a "serious" pact with the EU and that his country was a "major European state ... which defines itself as part of Europe".
But drafting a pact on which both Moscow and Brussels can agree is likely to be an arduous process.
The EU wants more access for its firms to Russia's energy sector, saying that is key to security of supply. Russia is reluctant to offer that and is making a counter-demand for better access for its companies to European markets.
There are differences too over human rights, trade, and rival interpretations of Europe's turbulent history.
EU leaders are also expected to use the summit to restate their concerns that Russia's support for a separatist region of Georgia is stoking tension in the former Soviet republic.
Even before the two sides tackle the substance of their pact, there is no consensus on the form the document will take.
Kremlin foreign policy adviser Sergei Prikhodko said Russia wants a brief, legally binding pact followed by a string of more detailed agreements.
The EU side has been non-committal about what sort of document it wants to see. EU Ambassador to Moscow, Marc Franco, said on this issue he was "confident that a consensus could be reached during the summit".
