A price dispute between Russia and Ukraine last month shut the transit route via which Europe receives a fifth of all its gas, and led to the most serious supply disruption for years.

President Dmitry Medvedev greeted EU Commission President Jose Manuel Barroso at the Kremlin, saying new legal mechanisms needed to be created to prevent a recurrence.

"The recent gas crisis has shown that things are not all right here," Medvedev said.

Barroso said the crisis should never have happened, but that he welcomed Medvedev's role in resolving the dispute.

"It is important now to create conditions for this kind of crisis not to happen again. We believe energy security is a very important sphere of interest for Russia and the European Union," Barroso, calling for "positive interdependence" in relations.

"And this positive interdependence is more important now than ever because we are facing a very serious global financial crisis," he said.

Diplomats expect no major breakthroughs on thorny issues such as energy, trade and the Kremlin's plan to build military bases in two breakaway regions of Georgia, which the EU says would violate Tbilisi's sovereignty.

"IMPROVE THE MOOD"

"There will be no deliverables, but after two major disputes in the past six months, over Georgia and then the Ukraine gas dispute, we can only hope it will help improve the mood," a senior European diplomat told Reuters before the talks.

The EU, Russia's biggest trading partner, cooled ties with Moscow in protest at its behaviour during and after the war last year with Georgia. Russia says the war was provoked by Georgian aggression and has recognised the two separatist regions -- Abkhazia and South Ossetia -- as independent states.

Europe's trust in Moscow was further undermined by the gas dispute in January that cut off many European states at the height of winter and underlined EU dependence on supplies from Russia's state-controlled gas behemoth, Gazprom.

Diplomats say there could be progress in negotiations between Brussels and Moscow on a Partnership and Cooperation Agreement. The EU will also reaffirm its encouragement for Russia's bid to join the World Trade Organisation.

Russia, the biggest economy outside the WTO, has been angered by what it says are unreasonable demands from major powers on entry conditions. Some diplomats believe Moscow may no longer be committed to WTO membership in the near term.

The EU delegation, which will include the commissioners for energy, trade, foreign relations and monetary affairs, will also discuss the impact of the economic crisis on the economies of the European Union and Russia.

"We are all in the same boat. Without strong global coordination we will not be able to face the negative consequences of the global crisis," Barroso said.