Kiev - Russian Prime Minister Vladimir Putin and Ukrainian Prime Minister Yulia Tymoshenko spoke by telephone shortly after midnight Thursday, and agreed to meet face-to-face for talks on energy on Saturday in Moscow.

The telephone discussion was "productive" and "gives hope for the development of a compromise," according to a statement from Tymoshenko's office.

Russia and Ukraine have been at a stand-off since January 1 over natural gas delivery terms.

An effective Kremlin embargo on gas shipments to Ukraine has been in effect for three weeks and on transit shipments to Europe for eight days so far.

Putin reportedly rang Tymoshenko in response to a Wednesday request by the Ukrainian prime minister they speak directly by phone.

The pair are due to meet in Moscow on Saturday to discuss a possible resolution to the energy deadlock between the two countries, and a renewal of natural gas deliveries to Europe, the Tymoshenko statement said.

Tymoshenko's willingness to travel to Moscow to meet with Putin reversed a position expressed on Wednesday by both her and Ukrainian President Viktor Yushchenko, that Ukraine's leaders were willing to meet with Russia's, but only at a neutral location in Europe.

The statement gave no reason for Tymoshenko's turnaround.

According to the statement, the Ukrainian government "immediately after the prime ministers' conversation" sent the Russian government a telegram repeating a long-held Ukrainian position that Ukraine will guarantee the delivery through its pipelines of all Russian natural gas earmarked to Europe, with the exception of 8 per cent of volume according to Ukraine needed to maintain sufficient pressure in the lines.

Ukraine further would guarantee payment to Russia in full for the 8 per cent of volume taken by Ukraine, as soon as a contract is in place regulating the price of Russian gas exports to Ukraine, the telegram read in part.

The 8 per cent cut of Russian gas deliveries to Europe proposed by Kiev to go to Ukraine is vehemently opposed by the Kremlin, whose officials have accused Ukraine of intending systemic theft of Russian gas and blocking legitimate gas shipments to Europe by faking problems with pipeline pressure.

The lack of a contract between Russia and Ukraine regulating natural gas shipments into Ukraine has been at the root of the present crisis, with both Kiev and the Kremlin manipulating energy deliveries to Europe in an attempt to wring better contract terms out of their opponent. (dpa)