April 28 (Bloomberg) -- Russian President Vladimir Putin, seeking a larger role in Middle East peace efforts, pledged to boost cooperation with Israel in fighting terrorism and urged Iran to reassure the world it's not building a nuclear bomb.

Putin signed agreements today with Israeli President Moshe Katzav at his residence in Jerusalem to increase business and cultural links between the two countries before discussing strategic issues over lunch with Prime Minister Ariel Sharon.

The Russian president, making the first visit to Israel ever by a Kremlin leader, wants to host a conference in Moscow later this year to help the peace process, an idea opposed by Israel and the U.S. He meets tomorrow with Palestinian Authority President Mahmoud Abbas in the West Bank city of Ramallah.

``We think there is a chance now to achieve a just Israeli- Palestinian settlement,'' Putin said during a news conference with Katzav broadcast on Israel Radio. ``Much will depend on Israel's willingness and the Palestinians' willingness, first and foremost,'' he said.

Putin proposed the Moscow conference during a meeting in Cairo yesterday with Egyptian President Hosni Mubarak and Palestinians immediately endorsed the idea. Both Israel and the U.S. say such a conference is premature and should depend on progress in meeting goals set down in the international peace plan known as the ``road map'' that seeks to establish an independent Palestinian state alongside Israel.

Closer Ties

Sharon said such disagreements won't interfere with closer ties the two countries are seeking to cultivate.

``I am certain that the warm relations between Russia and Israel, and between myself and President Putin, will remain as such and will become even warmer,'' he told Putin, according to a statement issued by his office. ``I want you to know that you are among friends here.''

More than 1 million Israelis came from Russia and other parts of the former Soviet Union since the 1970s when Jews were persecuted by the then Communist government. Natan Sharansky, a member of Sharon's cabinet, served eight years in Soviet prisons for his dissident activities before being freed because of international pressure in 1986.

Putin, who visited Christian and Jewish religious shrines after arriving from Egypt Wednesday night, told Katzav that the two countries have common interests in fighting militant movements that target their civilians.

Terrorism Cooperation

``We want to strengthen cooperation in the war against modern curses such as terrorism, extremism and nationalism,'' Putin said.

Putin also sharpened criticism of Iran's nuclear program, saying Russia's southern neighbor must go beyond the agreement it signed in February to return spent nuclear fuel it buys from Russia.

``I agree that this is not enough,'' Putin said during the news conference. ``Iran should abandon all technology to create a full nuclear cycle and not obstruct nuclear sites from international control.''

The U.S. has accused Iran of enriching uranium intended for nuclear power production so that the material can be used in a weapon. Sharon has expressed concern that Iran may target Israel if it develops nuclear weapons.

Iran Reactor

Iran, which has the world's second largest oil reserves, is paying Russia as much as $1 billion to build a reactor capable of generating about 1,000 megawatts of electricity in the southern city of Bushehr.

Russia took over the Bushehr contract after Ukraine pulled out of an agreement to supply turbines for the plant in 1998 because of pressure from the U.S. and Israel.

``We are working with Iran in order to develop the atom for peaceful ends and we are against any program that might give Iran atomic weapons capability,'' Putin said.

Putin also defended a plan to sell anti-aircraft missiles to Syria, which Sharon has been seeking to block, noting that 25 percent of Israelis have Russian origins.

``We want those people to live in security,'' he said. ``We are not planning to do anything that would upset the balance of forces in the region.''

Katzav said Israel has ``disagreements'' with Russia on the Syrian arms deal, citing fears that terrorist organizations could acquire the weapons from Syria.

To contact the reporter on this story: Jonathan Ferziger in Tel Aviv at jferziger@bloomberg.net

Last Updated: April 28, 2005 11:37 EDT