Russian President Vladimir Putin says he still hopes agreement can be reached on a proposed U.N. Security Council resolution on Iraq, before a donors conference later this month. Mr. Putin spoke after two days of talks with German Chancellor Gerhard Schroeder.

Russia and Germany both opposed the U.S.-led invasion of Iraq. But emerging from two days of talks in the Russian Urals, the two leaders showed signs of a willingness to compromise, most notably on the need for a new U.N. resolution on Iraq.

Russia and Germany remain dissatisfied with the wording of the U.S.-sponsored draft, under negotiation at the U.N. Security Council. Specifically, they would like to see a clear timeline established, outlining when Iraq could gain complete sovereignty, and who would oversee the financial reconstruction of the country.

But President Putin said "we still think it best, if the United Nations Security Council could adopt a new resolution on Iraq, before international donors are due to meet in Madrid, Spain on October 23."

President Putin says any money pledged would likely be put to better use, if a political settlement is first put into place.

The Russian leader says he and Chancellor Schroeder also agree that Iraq's post-war reconstruction process will only lead to stabilization, if the new resolution mandates greater international participation in the process.

Aside from aligning their views on Iraq, President Putin and Chancellor Schroeder's consultations also yielded six agreements aimed at increasing bilateral trade and improving economic relations.

One agreement allows German troops and military equipment to transit through Russia on their way to peacekeeping duties in Afghanistan. Another calls for easing visa regulations for Russian and German citizens in a bid to open markets and promote trade.

Chancellor Schroeder says he and President Putin are also just days away from signing a deal to build a giant pipeline under the Baltic Sea to bring Russian oil to lucrative European markets.

The only sour note of the discussions came when a visibly agitated President Putin criticized the European Union for imposing what he called wrong and unfair conditions on Russia's membership bid in the World Trade Organization.

The European Union has urged Russia to liberalize its energy prices, but the Russian president says the task cannot be achieved overnight.

President Putin says Russia considers linking the energy issue to Russia's bid to join the WTO to be political arm-twisting [pressure], and he urged the German chancellor to exercise influence with his EU partners.