Russia's frosty ties with Nato were also on the agenda

Russian President Dmitry Medvedev has said that the era of US global economic dominance is over.

Speaking after talks with German Chancellor Angela Merkel in St Petersburg, Mr Medvedev said the world needed a "more just" financial system.

Mrs Merkel's visit is seen as an effort to ease tensions between Moscow and the West over the war in Georgia. Russia is backing two breakaway regions there.

But Georgia's territorial integrity "is non-negotiable," Mrs Merkel insisted.

Mrs Merkel, like other Western leaders, has criticised Moscow's actions in Georgia in August. In the brief war Russian troops pushed well beyond the borders of breakaway South Ossetia and Abkhazia.

On Thursday Mrs Merkel called Russia's intervention in Georgia "disproportionate".

The talks come a day after European Union observers began patrolling in Georgia to oversee a withdrawal of Russian forces from "buffer zones" around the breakaway regions.

Russia has kept troops there since ousting Georgian forces. It has promised to complete its troop pull-out by 10 October, but it plans to keep nearly 8,000 troops in South Ossetia and Abkhazia.

Gas deal

In St Petersburg, Mrs Merkel and Mr Medvedev signed a long-awaited energy deal giving the German firm E.On a stake in a Russian gas field that will supply the Nord Stream undersea pipeline the two countries intend to build.

Germany's European Union neighbour Poland objects to the pipeline, which will deprive it of lucrative transit fees.

Some 40% of the natural gas Germany imports comes from Russia.



