The session, Putin's first in his role as premier, was broadcast on state TV and radio and lasted over three hours.
While the main focus was on the global financial crisis and its impact on the national economy, Putin also discussed a wide range of foreign policy areas, including relations with the United States, Russia's military role in Latin America, and the country's prickly relations with two ex-Soviet neighbors, Ukraine and Georgia.
The premier said he expects relations with the United States to improve after Barack Obama takes office in January, and that Moscow has already noted "positive signals" from Obama's transition team on key disputes - Washington's missile defense plans for Europe and NATO's expansion.
"As a rule, certain changes take place when power changes hands in any country, and this is particularly the case for the United States as a superpower. We hope these will be positive changes," he said.
On the controversial U.S. plans to deploy a missile shield in Central Europe, Putin said: "We are already hearing that the need to deploy a missile defense system in Poland and a radar in the Czech Republic needs to be reviewed."
The Bush administration has claimed the planned 10 interceptor missiles and radar are necessary to counter possible strikes from "rogue" states like Iran. Russia has argued the bases would upset the strategic balance of forces in Europe and threaten national security.
Putin said officials in the U.S. have indicated that Russia's interests will be given more consideration in building bilateral relations. "If these are not empty words, and if they are transformed into practical policy, our reaction will certainly be appropriate, and our American partners will immediately feel this," Putin said.
He also welcomed NATO's decision on Tuesday to delay Ukraine and Georgia's admission to the Membership Action Plan (MAP), a key step for entry into the military alliance. NATO's eastward expansion since the break-up of the Soviet Union has been a major source of Russian concern.
Gas sales to the EU
Putin said Russia is committed to cooperation with the European Union, which has strengthened economic stability for both sides, and expressed hope that new EU members would stop "clinging to the past" and review their attitudes to Russia.
"Our joint work will improve transparency, and enhance the reliability and stability of the Russian and European economies. We will continue to pursue this policy," he said.
His remarks came after the 27-nation alliance resumed talks earlier this week on a comprehensive cooperation treaty with Russia, which was suspended over its August conflict with Georgia and despite objections from the ex-Soviet Baltic state Lithuania.
Putin said the EU is Russia's largest trade partner, accounting for over 50% of trade, and highlighted their growing integration in the energy sector, pointing to European companies involved in oil and gas production in Russia, and European partners' cooperation in building new gas pipelines from Russia to Europe.
Russia meets a considerable portion of Europe's energy needs, making many countries uneasy over their dependence on Kremlin-controlled supplies. Russia, in turn, has been hard hit by the global credit crunch and falling oil prices, and needs reliable consumers for its natural gas.
However, Putin warned that Moscow could soon notify European natural gas consumers of cuts in supplies to Ukraine - which transits about 80% of Russia's Europe-bound gas - if the country fails to pay its gas debts on time.
European countries have followed relations between the former Soviet neighbors, whose bitter gas pricing row in early 2006 led to a brief cut in supplies to Ukraine and supply shortfalls reported by some consumers in Europe.
"If our partners do not fulfill agreements, we will have to reduce supplies. What else can we do?" Putin said.
Russia's Gazprom last month put Ukraine's outstanding debt at $2.4 billion. Some of the funds have reportedly been repaid, but Gazprom has demanded full payment, and threatened supply cuts.
However, Putin pledged efforts to improve ties with Ukraine, which he said must be fair and based on market principles, and reassured that the shift to European-level prices for gas would be gradual.
Frosty ties with Georgia
On Georgia, with which Russia fought a five-day war in August sparking fierce criticism from the West, Putin said Georgia's attack on South Ossetia ended any chance the Caucasus state had of bringing its breakaway republics back under central control.
He said the offensive had forced Russia to abandon any possible support for Georgia's territorial reunification.
Russia recognized South Ossetia and the other separatist republic Abkhazia as independent states two weeks after the armed conflict, prompting the EU to suspend cooperation talks and triggering calls in the U.S. for ousting Russia from the G8 club.
"This was a crime committed not only against Russia and its citizens and the Ossetians, but also against the Georgians, against the country's statehood," Putin said.
Warships in Venezuela
Putin moved to allay international concerns over Russia's recent naval maneuvers in the Caribbean, saying the country sees no need to set up permanent military bases in Venezuela or Cuba, but added it could use their military infrastructure.
Russian and Venezuelan warships concluded on Tuesday their joint drills widely seen as Moscow's response to the U.S.' aid to Georgia after the August conflict and its missile defense plans in Europe. Russia has denied any connection. (FULL TEXT)
