Russia and Ukraine have reached an agreement restoring natural gas supplies to Ukraine.

In a joint statement, the Ukrainian gas company Naftogaz and the Russian gas monopoly Gazprom said all restrictions on supplies to Ukraine have been lifted.  It also said gas pumped through Ukraine to western Europe is flowing at full volume.

The statement said the breakthrough followed a telephone conversation between Russian President Vladimir Putin and his Ukrainian counterpart, Viktor Yushchenko. 

The deal ended a weeklong standoff triggered by Russian demands that Kyiv pay $600 million owed Gazprom for gas consumed so far in 2008.  As tensions rose this week, Gazprom cut gas deliveries to Ukraine by more than 50 percent.  Ukraine, in turn, threatened to siphon gas meant for Europe.

Earlier Wednesday, Mr. Yushchenko told Prime Minister Yulia Tymoshenko in a letter that Ukraine's actions to settle the dispute had been "insufficient and inadequate."

The letter, posted on the official web site of the president, urged Ms. Tymoshenko to settle the dispute, which was resolved a short while later.

Some information for this report was provided by AFP, AP and Reuters.