"Our relations are developing in a positive manner, especially in the past few years," Putin said during a partially televised meeting with Martin at the Kremlin.

"After long years of stagnation in trade and economic relations, we are seeing an improvement," he said, stressing that trade between the two has grown by 20 percent in the first quarter of 2004.

Martin earlier held talks with Russian Prime Minister Mikhail Fradkov, with the two sides hoping to soon see annual bilateral trade reach one billion dollars.

The Canadian premier earlier chaired a round table of Russian and Canadian businessmen, exploring trade opportunities between the two countries that share similar climates and immense natural resources.

"This morning I was extremely pleased by the meeting with representatives of Russia's business circles," he was quoted as saying by the ITAR-TASS news agency.

"It has become completely clear that there are exceptional opportunities in your country for both our countries," he said.

Participants floated the idea of creating a Russia-Canadian business council similar to one that exists between Canada and the United States, Martin was reported as saying by RIA Novosti.

The meeting was attended by Russian and Canadian business delegations including representatives of Russia's Norilsk Nickel metals giant, Alfa Bank, and the Russian Union of Industrialists and Entrepreneurs.

Canada has invested around one billion dollars in Russia over the past decade, mainly in the spheres of oil, transport and agriculture, the ITAR-TASS agency reported.

The Russian energy giant Gazprom and the Petro-Canada corporation Monday signed a memorandum of understanding to build a facility producing liquefied natural gas in Ust-Luge, in the northwestern Leningrad region, designed to be exported to North America, the agency said.

Along with economic ties, Martin and Putin also briefly touched on ecology issues, with Martin calling on Russia to help Canada protect the Arctic region's environment, ITAR-TASS said.

Martin also congratulated Putin for his government's decision to approve the Kyoto global warming treaty after years of debating the document, in a move that should soon make the UN-sponsored protocol operational.

"I hope that Canada's position, together with the support of the prime minister, concerning Russia's decision to join the protocol will have a positive influence on the upcoming discussion in the Russian parliament," which must still ratify the treaty, ITAR-TASS quoted Martin as saying.

Martin leaves Moscow for Paris on Thursday.

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