Putin and Prodi met in the southern Italian city of Bari on Wednesday to discuss economic ties, including the construction of a civilian airliner and development of a railway system.

Putin was received with military honours at the Adriatic port city and welcomed by about 1,500 Bari residents lining the streets around the central Piazza della Liberta.

Trade turnover

Italy is Russia's third-largest commercial partner after Germany and China, and the two countries have a trade turnover of more than $26bn.
One of the main subjects at the talks was gas, as Italy's Eni SpA and Russia's state-controlled gas giant OAO Gazprom concluded a deal last year.

The industry ministers also signed a deal for the joint construction and marketing of a medium-range civilian plane.

Talks on a new co-operation pact were to have started last year but Poland vetoed the negotiations in protest at a Russian ban on imports of Polish meat and other farm products.

The EU has said it believes the ban is disproportionate.

The two leaders had already met on Tuesday evening in Rome and discussed international affairs including Kosovo and Iran's nuclear programme.

Russia has been reluctant to impose tough new sanctions on Iran, but has been moving close to an agreement with the United States and three European nations - Germany, Britain and France - on a new package of measures against the country.

Prodi's office said they were also to discuss the future of the disputed Serbian province of Kosovo as the EU prepares to support a UN plan that gives Kosovo virtual statehood.
 
Russia backs Serbia which rejects the UN proposal.