Russian President Vladimir Putin shakes hands with German Chancellor Angela Merkel in Moscow, Jan. 16, 2005.

    MOSCOW, Jan. 16 (Xinhuanet) -- Russian President Vladimir Putin said Monday that his country is ready to consolidate and expand its cooperation with Germany in bilateral and multi-lateral agreements.

    His three-hour talks with German Chancellor Angela Merkel, who arrived here Monday, was constructive and candid, said Putin.

    Both sides demonstrated the desire to maintain continuity in the development of their countries' strategic partnership, he said.

    Putin hailed the recent growth of German-Russian trade, which he said had reached a record 32 billion U.S. dollars last year, a 30-percent increase from 2004.

    Russia hopes to further strengthen cooperation with Germany in the fields of energy, advanced science, and technology, he said.

    Germany also, stands ready to strengthen its strategic partnership with Russia in many fields, said Merkel, who believes the two countries can develop their relationship in many areas.

    Merkel expressed support for plans to build a gas pipeline direct from Russia under the Baltic Sea to Germany and West European countries.

    The project has drawn criticism from Poland and other countries which currently provide transit corridors for Russian gas exports.

Putin and Merkel hold a joint press conference in Moscow, Jan. 26. 2005.

    Merkel hailed the project as an "important project for Europe and Germany," adding that "this project is not directed against anyone."

    Merkel and Putin also discussed subjects such as the conflicts in Chechnya and the North Caucasus. Merkel admitted that though the talks were candid, she and Putin "did not always agree."

    However, she said, Germany will try to ensure that the European Union¡¯s actions regarding the situation in the North Caucasus were constructive.

    On the most contentious issue of how to deal with Iran's nuclear program, Putin cautioned that the issue had to be handled with great care.

    "In any event, we must work on the Iranian problem very carefully, not allowing abrupt, erroneous steps," he said.

    "As for Russia and Germany, and our European partners and the United States -- we have very close positions on the Iranian problem," he said.

    Russia will continue cooperating with Europe and the United States to resolve the Iranian nuclear problem, said Putin.

    Putin's comments came as high-level international talks were under way in London over the possible referral of Iran to the United Nations Security Council concerning its nuclear programs. Enditem