Tensions between Russia and the West over sanctions against Iran will be laid bare today as President Vladimir Putin attends a summit with EU leaders in Portugal.

The Russian leader described supporters of tough policies as "mad people wielding razor blades" after the US imposed economic sanctions on the Islamic republic yesterday in an attempt to curb its nuclear programme.

Mr Putin, who is at the summit to discuss disputed trade issues with the EU, is expected to make further comments on Iran this afternoon after a senior American diplomat suggested that Russia was "aiding and abetting" the Iranian military.

Nicholas Burns, US Assistant Secretary of State, said that Russia should stop selling weapons to Iran, and China should stop investing in the Middle Eastern state. "They're now the number one trade partner with Iran," he told the BBC. "It's very difficult for countries to say we're striking out on our own when they've got their own policies on the military side, aiding and abetting the Iraninan government in strengthening its own military."

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The province has become the focus of international power play between Russia and the EU and US

David Charter, Europe Correspondent of The Times

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Western powers suspect that Iran is trying to build up a secret nuclear weapons capability. Iran insists that its nuclear programme is aimed only at producing energy and Russia is helping Tehran to build a reactor.

Mr Putin will also address a bid for independence by Kosovo, the autonomous province in southern Serbia that became a battleground in 1999, when Nato jets bombed Serbian forces in the region after the collapse of peace talks. The Russian President has previously blocked moves to allow Kosovo to secede.

The EU-Russia summit, which marks 10 years since Brussels and Moscow signed a partnership agreement, is being held in the former Portuguese royal residence of Mafra, 25 miles outside Lisbon.

The last summit near the Russian city of Samara earlier this year was marred by bitter disputes between Putin and EU leaders over the state of democracy in Russia and EU officials had been hoping to improve relations.

Jose Socrates, the Portuguese Prime Minister whose country holds the EU presidency, will host today’s talks alongside the EU foreign policy chief Javier Solana and European Commission president Jose Manuel Barroso.

Economic relations between Brussels and Moscow have boomed despite frequent rows, with trade turnover going up 3.5 times to an annual $300 billion (209 billion euros) since Mr Putin became president in 2000, officials said.

But political negotiations to formulate a new EU-Russia partnership agreement remain stalled because of a Polish veto imposed after Russia banned the import of meat from Poland in 2005 over food safety concerns.

A new partnership accord is seen as particularly important for the European Union because it is intended to regulate also energy ties as Europe increases its reliance on Russian oil and gas imports.

Hopes of a breakthrough in the dispute were raised by the victory on Sunday in Poland’s parliamentary elections of a pro-European party that has also vowed to improve relations with Moscow.

Benita Ferrero-Waldner, the EU’s External Relations Commissioner, said that partnership talks were more likely to start at the next summit in 2008, which will also come after parliamentary and presidential elections in Russia. “We want this summit to be business-like,” Ferrero-Waldner said on Friday.

She said that she expected Russia to commit to partial financing for regional cooperation projects with the European Union and said the EU would raise the quota for Russian steel imports.

Referring to energy, she said:“We’re going to tell them that it’s very, very important to liberalise the markets in that sector. We want more reciprocity, more transparency, more openness."

The European Union has called on Russia to free up its gas market for EU companies, while Russia has in turn accused Europe of blocking access to EU markets for state-controlled gas giant Gazprom.

Officials are also due to confirm an earlier agreement on a new system to warn European countries ahead of time about possible cuts in energy supply from Russia.

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