MOSCOW, Jan 11 (AFP) - Russian President Vladimir Putin and Turkish Prime Minister Recep Erdogan celebrated Tuesday booming trade relations between the two Cold War foes during Kremlin talks in which the two struck new energy and military agreements.
Putin -- who invited Erdogan for a private dinner at his lavish suburban Moscow estate Monday evening -- told the Turkish prime minister that economic ties were growing by the best possible scenario as old tension wanes.
Erdogan, accompanied by a swarm of 600 businessmen, was paying a return visit to Moscow after Putin in December became the first Moscow leader to appear to great fanfare in Turkey in 32 years.
"Our most optimistic forecasts about economic cooperation have come true," Putin told Erdogan as the two sat around a small table with their translators in the Kremlin's gilded oval reception hall.
"According to our forecasts, trade volume could reach 15 billion dollars (annually) very soon," Putin said.
Erdogan had forecast bilateral trade reaching up to 25 billion dollars by 2007 on his arrival to Moscow on Monday.
Trade between the two countries reached 10 billion dollars last year to make Russia Turkey's second-largest trading partner after Germany. NTV television reported that Putin was "surprised" to hear the news.
The two Black Sea states have a raft of diplomatic disagreements that the two sides try to hide at public meetings at which prized economic trade -- in both private and public sectors -- takes center stage.
Both sides have previously accused the other of hiding enemy rebels -- Moscow charges that Chechen guerrillas hide in Turkey and Ankara counters that its independence-driven Kurdish minority finds support in Russia.
Diplomatic ties have also been complicated by Armenia: a former Soviet republic which remains a close Moscow regional ally but which demands that the world accept that Turkey committed "genocide" against its people during World War I.
But Putin made it clear he thought these disputes paled in comparison to the size of potential trade.
Turkey relies heavily on Russia's natural gas supplies that run through the Blue Stream pipe under the Black Sea that Moscow hopes one day to stretch to Israel.
Ankara already negotiated a discount in 2003 for the gas supplies and Turkish media reports said it was hoping to do the same for the coming year.
Putin said vaguely that an agreement on an increase in gas supplies had been reached Tuesday but made no mention of the price.
He also tried to appease his guest by saying he would press the international community to speed up its effort to lift an international blockade on the unrecognized Turkish-controlled northeastern half of Cyprus.
The Russian leader said he spoke to UN Secretary General Kofi Annan on Tuesday morning about "plans for developing economic cooperation with the northern part of Cyprus and the lifting of its economic blockade.
"We do not think that the political isolation of Northern Cypriots is fair," Putin said.
Speaking in broader terms on the two sides' relations, Erdogan said: "Both sides have the political will to move forward."
It remained unclear however what military agreements may have been struck by the two sides.
Putin said only that "we have had previous plans concerning military-technological cooperation. I would like to say a few words about this issue, too."
Erdogan replied that "we will have a chance to discuss the expansion of military-technological cooperation" before reporters were ushered out of the Kremlin hall.
Erdogan will attend a meeting of Russian and Turkish businessmen Wednesday and inaugurate a Turkish Trade Center -- a 9,000-square-meter complex of shops and business, in central Moscow.

01/11/2005 16:36 GMT - AFP