Moscow has given up the idea of dragging Ukraine into its customs union in return for gas price discounts, and is ready to discuss a gas transit consortium with Ukraine and the European Union, Kommersant business paper reported on Monday, a day after Ukrainian President Viktor Yanukovych claimed there had been progress during talks over gas prices.

Citing diplomats who attended Saturday's meeting of Russian President Dmitry Medvedev, Prime Minister Vladimir Putin and Ukrainian President Viktor Yanukovych, the newspaper concluded that the tension in the Russian-Ukrainian relations started to ease.

"The meeting has been momentous for Yanukovych, especially in the view of the recent events in Russia. The two leaders - both Medvedev and Putin – have found time to meet with him, it is important for the Ukrainian president," one of the Russian negotiators told the newspaper.

Following the meeting, the Ukrainian president's press office said that "considerable progress had been reached during the negotiations" but declined to elaborate, while a senior Ukrainian diplomat told the paper that the issue of Ukraine's membership in the Customs Union could now be considered as closed.

"Kiev is not going to get integrated into the Customs Union. Look at our president: He will not yield to pressure," the paper quoted the diplomat as saying.

The newspaper's interlocutor said that Moscow was likely to abandon the plans of the involvement of Kyiv in the Customs Union to the maximum possible extent. "Russia's participation in the management of Ukrainian gas transportation system is much more important," the official said.

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