A Kremlin spokesman confirmed the meeting but said he could not immediately give comments.

Putin, 53, declined to give any details about who could succeed him in 2008, when he must step down after two four-year terms in office. Because the Kremlin has so much power, the issue of his successor is the hottest political topic in Russia.

During the lunch of artichoke soup, octopus carpaccio and sea bass, Putin did not say what he would do after he stepped down but at one point even expressed weariness with politics and said he had not been successful in rooting out corruption.

"He spoke about things he would recommend his successor do," said Nikolai Zlobin, director of the Russian and Eurasian project at the World Security Institute in Washington.

The recommendations would include the struggle with poverty, the creation of a real multi-party system, regional reforms, the diversification of the economy and high levels of growth, said Zlobin, who sat next to Putin at the lunch.

Answering dozens of questions, Putin ranged across foreign and domestic policy, speaking out against sanctions on
Iran, implicitly opposing independence for Kosovo and heaping praise on Ukraine's President Viktor Yushchenko.

He said it was his job to improve relations with the United States, which have cooled because of differences over gas supplies to Europe, accession to the World Trade Organization and competition for allies among ex-Soviet nations.

"My impression was that he was doing his best to improve relations with his international counterparts," said Marshall Goldman, professor of economics at Wellesley College, Massachusetts.

"He tried very hard to make positive comments about President (George W.) Bush and he did not have to make such positive comments."

But he criticized Bush's "bad advisors" and said the
European Union "was very difficult to deal with," although the Kremlin wanted a closer partnership with it, people at the meeting said. He also praised Russia's relationship with China.

A further radar satellite is set to be launched later this year, completing the set of four.

The optical satellite will be able to differentiate objects a meter (yard) or more in diameter, although this level of resolution is far outclassed by U.S. military satellites. A ban on defense use of space dating from the 1960s has hampered Japan's ability to develop high-tech hardware.

With two similar satellites in orbit, the Japanese government will be able to monitor any point on Earth once a day, an official at Japan's Cabinet Satellite Intelligence Center said.

Japan planned its spy satellite program following North Korea's 1998 launch of a ballistic missile that flew over Japan and landed in the Pacific Ocean.

On July 5, Pyongyang launched another volley of missiles, sparking unease across the region.

North Korea reacted angrily to South Korea's July launch of the Arirang-2 surveillance satellite capable of monitoring military movements.

But the diplomat was unclear whether Iran would meet Western demands it suspend enrichment before talks on trade incentives designed to halt Iranian pursuit of technology.

Two months is nothing, as the United States and others want a long-term suspension to restore confidence that Iran's nuclear programme is geared only to generate electricity, the diplomat was quoted by the Reuters as saying.

The weekend talks in Vienna were seen as a final chance to seek a compromise before possible punitive action after Iran ignored an Aug. 31 Security Council deadline to stop purifying uranium for use as nuclear fuel.

Larijani and Solana said they cleared up misunderstandings and made progress in a search for common ground.

Solana consulted with foreign ministers of the six powers by phone during the talks and would brief them on the results before they hold a conference call on Monday to discuss what to do next, EU diplomats said.

However, Aliasghar Soltanieh, Iranian ambassador to UN nuclear watchdog agency who accompanied Larijani, denied that a suspension had been discussed with Solana.

"Iran has openly said that there is no legal and technical basis for such a demand (to suspend enrichment)," Soltanieh told Iranian state television in an interview aired from Vienna.

Tehran insists its nuclear programme, based on the uranium enrichment, is entirely peaceful.

The US and Britain suspect that Iran is engaged in a camouflaged bid to assemble nuclear bombs.

The EU, Russia, China and the US have offered Iran a package of economic, trade, political and nuclear incentives if it shelves its enrichment activities, but Tehran says it is willing to negotiate on the offer only without any preconditions.