May 17 (Bloomberg) -- President Vladimir Putin and European Union leaders begin a two-day summit today, with the EU promoting the meeting as a chance to mend fences after a series of disputes between Russia and former Soviet satellites in eastern Europe.

Putin will host an informal dinner with German Chancellor Angela Merkel, whose country currently holds the EU presidency, and European Commission President Jose Manuel Barroso near the southern Russian city of Samara tonight before talks continue tomorrow. With eastern European grievances against Russia mounting, German Foreign Minister Frank-Walter Steinmeier said this week the talks will be ``difficult.''

Seven eastern European countries that were once within the Soviet sphere of influence joined the EU in 2004. Escalating spats between those nations and Russia include a Russian ban on Polish food products and Estonia's decision to relocate a Soviet-era war memorial. Russia has also objected to U.S. plans to build missile- defense bases in Poland and the Czech Republic.

``It is easy to destroy trust and it has been largely destroyed between Russia and the West,'' said Masha Lipman, a political analyst at the Moscow Carnegie Center. ``It is high time that both sides realize this deterioration in relations has gone too far.''

The standoff is preventing the 27-nation EU from upgrading a decade-old trade accord with Russia, its third-largest trading partner. A key goal is to secure energy supplies from Russia, the source of a quarter of the EU's natural gas.

Oil Pipeline

Lithuania became the latest eastern EU country to complain about Putin's foreign policies by saying that it may join Poland in blocking the start of new trade and cooperation talks. Lithuania is urging Russia to reopen an oil pipeline that has been shut since July after an accident.

Poland, for its part, is angry over Russia's refusal to allow imports of its meat. Polish Foreign Minister Anna Fotyga called the embargo ``a kind of declaration of war'' and called today for a suspension of her country's talks with Russia.

Russian politicians including First Deputy Prime Minister Sergei Ivanov have called for a boycott of Estonian goods after the Baltic state moved a monument to Soviet soldiers who died during World War II from the center of the capital Tallinn to a cemetery.

The decision triggered riots in Tallinn in which one Russian died and was followed by angry protests outside the Estonian embassy in Moscow in which the Swedish ambassador's car was damaged. The EU and several of the bloc's governments protested.

Sarkozy

The election of Nicolas Sarkozy to the presidency in France may also strain relations between Russia and the EU. Sarkozy, the son of a Hungarian immigrant who fled to France to escape Communist rule, has signaled that he will take a tougher line toward Putin than his predecessor Jacques Chirac.

Steinmeier visited Moscow May 15 to try to clear the air with Putin. The two sides must resolve ``those differences of interests, and sometimes even collisions of interests, which exist between us, and not let them become serious political conflicts,'' the German minister said.

``Thank God that so far there are no conflicts between us,'' Putin replied, according to comments posted on the Kremlin Web site.

The Partnership and Cooperation Agreement between Russia and the EU expires this year. Hopes of starting talks on a replacement in November were dashed amid Polish objections to the Russian meat ban.

Deal `Unlikely'

EU decisions on trade treaties must be unanimous, handing power to the seven former Soviet satellites and frustrating older EU members' efforts to find common ground with Russia.

``We're going ahead with the summit even though it's unlikely Poland and Russia can settle their differences,'' German Deputy Foreign Minister Guenter Gloser said in an interview in Berlin May 15. ``There's too much at stake, too many mutual interests, to drop the talks, even if it means a new agreement probably won't be signed under Germany's EU presidency.''

Under the headline ``A Pointless Summit,'' Russian newspaper Vedomosti forecast that the meeting will end without an accord.

Even so, Sergei Yastrzhembsky, Putin's top EU aide, blamed Russian and foreign media for giving the impression relations between the two sides ``are in some kind of crisis.''

``On the whole relations between Russia and the European Union are developing not at all badly,'' he told a May 16 press conference.

To contact the reporter on this story: Sebastian Alison in Moscow at Salison1@bloomberg.net.

Last Updated: May 17, 2007 09:30 EDT