Russian President Dmitry Medvedev used frank talks Thursday to urge Iranian counterpart Mahmoud Ahmadinejad to keep his country's nuclear ambitions peaceful or risk further international isolation.

In what the Kremlin called a "completely open" exchange, Medvedev told Ahmadinejad on the sidelines of a regional summit here that nations stood ready to support Iran as long as it kept any military ambitions in check.

"The conversation was of a completely open nature. Neither ourselves nor our colleague avoided the unpleasant questions," Medvedev's top foreign policy aide Sergei Prikhodko, who took part in the talks, told reporters after the meeting.

"The president (Medvedev) spoke of the importance of the continuation of a peaceful Iranian nuclear programme. An example (of such cooperation) came at Bushehr" where Russia recently launched Iran's first nuclear power plant, he added.

Prikhodko stressed that projects such as Bushehr were possible because they came under the auspices of the United Nations -- a clear reference to how Russia would like to see Iran behaving.

"We are interested in developing further trade and economic contacts that fall outside the existing sanctions framework," said Prikhodko.

The comments kept to the careful diplomatic line that Russia maintained in the days leading into the high-stakes encounter: strongly backing more talks with Iran while resisting showing outright support for its president.

Relations between the two have suffered a recent breakdown as Moscow begins to question Tehran's policies and give more support to the group of world powers that will once again tackle the crisis on December 5.

In a sign of the Baku meeting's sensitivity and in contrast to usual practice, Russian state television skipped over the opening remarks and showed only the two president shaking hands and Ahmadinejad smiling broadly.

The two leaders also made no public remarks after the meeting.

Ahmadinejad's smile hid Iran's frustrations with its longtime ally. Russia has not only accepted a string of United Nations sanctions against the country but even bowed to Western pressure in scrapping a key Iranian missile deal.

A furious Ahmadinejad accused Russia of selling out "to our enemies" and on Thursday insisted that all pressure on his country would fail.

"They think that they will achieve something by putting pressure on Iran. But they will not," Ahmadinejad told a press conference before the meeting.

"They hope that a blockade of Iran will change the Iranian people. But the Iranian people will not be broken by sanctions."

Analysts had billed the Baku encounter as a last chance for Tehran to step out of its growing international isolation and show good will toward an ally whose backing it simply cannot afford to lose.

Yet Tehran's tone going into the meeting was firm.

It insisted that Iran can do without the Russian weapons and even claimed it had developed and tested a system very similar to the S-300 missiles that Russia never sent.

Military analysts have expressed doubt over similar Iranian claims in the past.

The Caspian Sea summit itself -- the third gathering of nations that also includes Azerbaijan and the Central Asian states of Kazakhstan and Turkmenistan -- ended with little progress.

The leaders agreed to try to boost trade through more open borders and signed a string of smaller agreements that included a plan to introduce a moratorium on fishing for sturgeon and its precious roe.

But they once again failed to resolve the most important impasse: how to split up the sea and its vast energy resources.

Iran insists on dividing the Caspian into five equal portions while the Azerbaijanis are angling for access that corresponds to each country's coastline.