PRESIDENT Yeltsin, taking a further step in his comeback from illness, met European Union leaders yesterday and received praise over reforms at the start of a week that could bring a government reshuffle in the Kremlin.
Mr Yeltsin told the European Commission President, Mr Jacques Santer, and the Dutch Prime Minister, Mr Wim Kok, whose country holds the EU's rotating presidency, that he was pleased with Russian EU relations and they were vital for Europe's security.
Mr Kok responded in a similarly positive vein after meeting Mr Yeltsin in the Kremlin.
"Of course problems remain, but Russia is on the right track [of economic reforms]," Mr Kok told a news conference. "It is clear that Russia and the European Union need each other and have the political will to co-operate."
The Kremlin said in a statement that agreement was reached in principle on a permanent mechanism to deal with economic, trade, scientific and cultural issues between Russia and the EU.
The Russian side pressed demands for more access to European markets something EU companies fear could unleash a flood of cheap imports.
Mr Yeltsin also repeated Moscow's opposition to NATO's plans to offer membership to some former Soviet bloc states in eastern and central Europe.
The NATO Secretary General, Mr Javier Solana, visits Moscow this weekend in a new effort to soothe Russian fears over expansion and an aide is due in Moscow today to prepare the visit.
The Russian deputy foreign minister, Mr Nikolai Afanasevsky, told Interfax news agency that Moscow expected him to bring "constructive" proposals.
Russia regards NATO's enlargement as a threat to its security and wants a legally binding treaty with the alliance to safeguard its interests.
Moscow and NATO hope to reach agreement before an alliance summit in Madrid in July at which the first new membership invitations are to be issued.
"The Russian attitude has not changed [from opposing NATO expansion] but at the same time there is a strong will to reach a set of conclusions before Madrid" Mr Kok said.
Mr Yeltsin's EU summit was originally scheduled for February 4th in The Hague but was postponed when he came got pneumonia in January after a brief return to the Kremlin following his November heart bypass operation.
Mr Yeltsin was now in excellent spirits, a creative, active negotiating partner", Mr Kok said.
Clearly determined to stamp his authority after spending most of the first eight months of his see end term out of action, Mr Yeltsin has criticised the budget of the Prime Minister, Mr Viktor Chernomyrdin, and demanded a reshuffle.
Government changes are expected to be announced after Mr Yeltsin faces his biggest physical test in public since his re-election campaign, when he gives a 40 minute state of the nation address to parliament on Thursday.
John Palmer adds from Brussels:
NATO has drawn up a "politically binding" draft agreement for a Russia/NATO charter designed to draw Russia closer to the Atlantic alliance even as it prepares to recruit new members in central Europe this year.
Encouraged by progress in talks with the Russian government, the NATO secretary general, Mr Solana, will discuss the draft text with the Russian foreign minister, Mr Yevgeny Primakov, later this week.
In an interview yesterday before leaving for London and in talks both with the British government and Labour opposition leaders, Mr Solana stressed the importance of the planned summit meeting between Mr Clinton and Mr Yeltsin in Helsinki this month.
It could "strike a deal" which would lead to a formal NATO/Russia agreement on security Cooperation and to further cuts in both nuclear and conventional arms.
Although politically binding, the draft agreement would not be a legal treaty of the kind sought by Moscow.
"I must say I am optimistic, but my job and that of Mr Primakov is to see that if President Yeltsin and President Clinton decide to jump into the swimming pool together that we have ensured there is enough water in there," he said.