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Merkel seeks progress with Russia 'US dominance is over' - Medvedev
(40 minutes later)
German Chancellor Angela Merkel has met Russian President Dmitry Medvedev for talks aimed at easing tensions over the war in Georgia. Russian President Dmitry Medvedev has said that the era of US global economic dominance is over.
Iran's nuclear programme and the global financial crisis were also on the agenda in St Petersburg. Speaking after talks with German Chancellor Angela Merkel in St Petersburg, Mr Medvedev said the world needed a "more just" financial system.
Germany is seen as one of Russia's closest allies in the West, but Mrs Merkel has been critical of Moscow's actions in Georgia in August. Mrs Merkel's visit is seen as an attempt to ease tensions between Moscow and the West over the war in Georgia.
Germany is seen as Russia's close ally in Europe but Mrs Merkel has criticised Moscow's actions in Georgia in August.
However, she has urged the West to maintain a dialogue with the Kremlin.However, she has urged the West to maintain a dialogue with the Kremlin.
The talks come a day after European Union observers began patrolling in Georgia to oversee a withdrawal of Russian forces from "buffer zones" around Georgia's breakaway regions of South Ossetia and Abkhazia.The talks come a day after European Union observers began patrolling in Georgia to oversee a withdrawal of Russian forces from "buffer zones" around Georgia's breakaway regions of South Ossetia and Abkhazia.
Russia has kept troops there since ousting Georgian forces in August. It has promised to complete its troop pull-out by 10 October, but it plans to keep thousands of troops in the breakaway regions.Russia has kept troops there since ousting Georgian forces in August. It has promised to complete its troop pull-out by 10 October, but it plans to keep thousands of troops in the breakaway regions.
Booming tradeBooming trade
In St Petersburg, Mrs Merkel and Mr Medvedev were also expected to discuss how to boost growing bilateral trade.In St Petersburg, Mrs Merkel and Mr Medvedev were also expected to discuss how to boost growing bilateral trade.
The Russians want German technology, while the Germans seek access to Russian markets, the BBC's Steve Rosenberg in Berlin says.The Russians want German technology, while the Germans seek access to Russian markets, the BBC's Steve Rosenberg in Berlin says.
Some 40% of the natural gas Germany imports comes from Russia, and the two countries are now building a pipeline under the Baltic Sea to bring Siberian gas to Europe.Some 40% of the natural gas Germany imports comes from Russia, and the two countries are now building a pipeline under the Baltic Sea to bring Siberian gas to Europe.
Many German business leaders believe their future depends on good relations with Russia, our correspondent says.Many German business leaders believe their future depends on good relations with Russia, our correspondent says.
He says Berlin does not want its good links with Moscow to be broken now by a new stand-off.He says Berlin does not want its good links with Moscow to be broken now by a new stand-off.