Russia and Belarus have taken a tough stand in their dispute over the pipeline transit dispute that has halted the flow of Russian oil to western Europe where questions are once again being raised about Russia's reliability as an energy supplier. European leaders shot back with heavy-handed criticism as Bill Gasperini reports for VOA from Moscow.

The talks led by top officials from both Russia and Belarus started late in the day Tuesday with both sides blaming each other.

Belarus insists that Russia must pay a new transit tax of $45 per ton of oil that passes through pipelines across its territory.

Russia calls the tax "illegal" and admits that it halted the flow after Belarus began siphoning off oil as compensation once Moscow refused to pay the tax.

But, Russian President Vladimir Putin sounded conciliatory Tuesday, calling for cooperation between the two parties.

He says it is necessary to continue talks with Belarusian partners on settling relations connected with our oil deliveries to Belarus and with the transit of our oil to Western customers. He went on to say that is necessary to secure the interests of Russian companies which apparently will face certain losses, insure an equal approach to the marketing of oil on external markets and consider a set of measures to minimize their losses.

The disruption of Russian oil supplies has upset the European Union, with many countries calling for moves to find alternate sources of energy supplies.

Jose Manuel Barroso, European Commission President, described Moscow's halt in oil deliveries as unacceptable.

"We believe it is not acceptable for either supplier or the transit countries to take measures that impact their partners without consultation," he said. "And this, of course, is a matter of concern for us. This situation adds urgency to our drive to boost our common energy policy. It is another demonstration, if is was necessary, that we need a common energy policy. And that's precisely why tomorrow we are going to present some comprehensive proposals."

German Chancellor Angela Merkel agreed.

She says she supports what Jose Manuel Barroso said, namely that it is not acceptable when there are no consultations about such actions. That always destroys trust and no trusting, undisturbed cooperation can be built on that. She went on to say that Germany will certainly tell its Russian partners and also Belarus that such consultations are the minimum when there are problems.

She said Germany will have to find ways to reduce its dependence on Russian oil and gas.

This may be a bitter pill for Russian President Vladimir Putin to swallow, especially given that Germany and Russia are working together on a much-criticized, multi-billion dollar project to lay a new gas pipeline under the Baltic Sea.

Once close allies, relations between Russia and Belarus have grown increasingly tense in recent years as Moscow has pursued a policy of eliminating cheap energy subsidies to former Soviet states such as Belarus.