ST. PETERSBURG, Russia, July 15 (Xinhua) -- U.S. President George W. Bush and his Russian counterpart Vladimir Putin met on Saturday amid escalating violence in the Middle East but the talks were overshadowed by the failure to clinch a deal on Russia's entry to the World Trade Organization (WTO).

    The Bush-Putin meeting preceded a summit of the Group of Eight (G8) major industrial powers in St. Petersburg, the Russian leader's hometown. The two were to be joined by leaders from Britain, Canada, France, Germany, Italy and Japan later in the day for their annual gathering, which runs through Monday.

    Speaking at a joint press conference with his Russian counterpart Putin after their talks, Bush blamed Hezbollah for the escalation of violence in the Middle East.

    "The best way to stop the violence is for Hezbollah to lay down its arms, and to stop attacking. And, therefore, I call upon Syriato exert influence over Hezbollah," Bush said.

    Israel has stepped up air raids on Lebanese targets and blockaded Lebanese sea ports following a cross-border attack by Hezbollah guerillas during which two Israeli soldiers were kidnapped and eight killed.

    At least 60 Lebanese, most of them civilians, have been killed and about 200 others wounded since the start of the Israeli operation on Wednesday.

    Hezbollah showered northern Israel with a salvo of rockets, killing two people and wounding about 100.

    Putin called for an end to the violence.

    "In any case, bloodshed should stop as soon as possible," Putin said. "Escalation of violence, in our opinion, will not yield positive results," he added.

    Russia and the United States are members of the international Quartet mediating for peace in the Middle East. The Quartet also includes the United Nations and the European Union.

    Speaking on the absence of an agreement on Russia's entry into the World Trade Organization (WTO) before the summit, Bush said the deal is "almost reached," but more work needs to be done.

    "We want Russian accession to the WTO," Bush said, adding that he wants the deal to be approved by the U.S. congress. "The intention to reach an agreement is there," he said.

    Putin said on the same occasion: "We will continue working together, maintaining our interests, the interests of our developing economy," Putin said.

    WTO talks are "concrete, calculable in their nature, which can be expressed in terms of millions of dollars or rubles, he added.

    Top Russian and U.S. trade officials worked furiously over the past three days in a bid to cap the marathon talks with a deal.

    Russia, the largest economy still outside the Geneva-based WTO, has been negotiating to join the world trade body since 1993.

    The United States remains the last hurdle to Russia's longtime WTO bid. The talks have snagged on financial services, particularly a U.S. demand that foreign banks be allowed to open directly their own branches in Russia.

    During negotiations on Wednesday and Thursday, Russia agreed to allow U.S. insurance companies access to its market.

    "We have agreed to opening branches by foreign insurance companies, but insisted that no branches of foreign banks be opened in Russia," Finance Minister Alexei Kudrin said on Thursday.

    On other issues, Bush and Putin said they have agreed on a plan to prevent the spread of nuclear weapons by setting up international enrichment centers. Enditem