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The leaders discussed the current situation in the conflict zone and problems of recovery of the Abkhazian national economy, which had been destroyed during combat operations.

They also focused on Russian-Georgian cooperation in combating terrorism and guarding their common border.

The Russian President told his Georgian counterpart about his meeting with Ukrainian, Belarusian and Kazakh leaders, which took place on February 23 in Moscow, and the four-party work on the creation of the Common Economic Space.

After the talks, Mr Putin and Mr Shevardnadze made a joint statement. They noted the need to coordinate their efforts to help settle the Georgian-Abkhazian conflict, primarily to return the refugees and displaced people, the future opening of a rail link between Sochi and Tbilisi, modernisation of the InguriGES hydroelectric power plant and possible hydraulic facilities on the Inguri River.

The two leaders pointed out that the rail link between Tbilisi and Sochi would be constructed together with the return of Georgian and Abkhazian residents to their homes, first of all, to the Gali district.

Taking into consideration the extension of the mandate of the collective peacekeeping forces in the conflict zone until September 30, the Presidents agreed to keep forces there until one side proposes to stop the operation.

During a joint news conference with Mr Shevardnadze, Mr Putin praised the results of the Sochi talks. The Russian President said the discussions had been constructive and fruitful.

Mr Putin assured the journalists that his position on the Abkhazian issue had not changed: the problem should be solved with respect to Georgia's territorial integrity and the interests of Abkhazia.

The Russian President said that the realisation of the agreements reached during the talks would help settle the conflict and bring stability to the region.