Putin told reporters in the Kazakh capital, Astana, that the two countries had trodden "a difficult path" but had "found a just and fair resolution to the gas question" after meeting Yushchenko for the first time since the crisis.

Yushchenko agreed, saying: "We succeeded in finding an agreement that is good for everyone. Ukraine will respect agreements made with Russia and Europe to the letter."

The two leaders were in Kazakhstan for the inauguration of veteran Kazakh President Nursultan Nazarbayev.

The chairman of Russian energy giant Gazprom, Aleksei Miller, and Russian Energy Minister Viktor Khristenko, as well as Ukrainian Energy Minister Ivan Plachkov and the head of Ukraine's state-owned energy company Naftogaz, Oleksiy Ivchenko, also attended the ceremony.

A face-saving agreement

The crisis came to a head on New Year's day when Russia briefly shut off gas supplies after Ukraine refused a four-fold price increase, causing disruption in gas deliveries to other countries in Europe further downstream. Europe receives nearly one-fifth of its annual gas imports from Russia via Ukraine.

The two sides signed a face-saving agreement on January 4 which resulted in a near doubling of gas prices for Ukraine.