Recep Tayyip Erdoğan (as translated): Mr Prime Minister, ladies and gentlemen,

I am pleased to welcome my good friend Vladimir Putin from Russia, our friendly neighbour, to attend a meeting of CICA (the Conference on Interaction and Confidence-Building Measures in Asia).

This visit has given us yet another opportunity to meet in person. It is a great pleasure for me. Mr Putin and I had a very constructive discussion during a breakfast meeting. We have used this occasion to raise our cooperation to a higher level, and this visit has given us another chance to discuss our countries' relations. We are witnessing the most intensive period in the history of Russian-Turkish relations, and we hope that they will continue to gain momentum.

We have similar approaches to issues such as peace and cooperation both regionally and internationally. We show solidarity with one another, and our recent work together has met with great success.

Both countries have a strong desire to continue to expand relations. Two important agreements were just signed during our bilateral talks, which will spur Russian-Turkish relations onward. I hope that stronger relations between Russia and Turkey will promote peace, stability and economic growth throughout the region, including the Caucasus.

Mr Prime Minister, ladies and gentlemen,

As you know, Turkey has a multi-faceted relationship with Russia. Foreign policy is a priority. Russian President Dmitry Medvedev visited Turkey on May 11 and 12. This visit was another step forward in our relations. The High-Level Cooperation Council gave a very positive assessment of our relations during his visit. Important steps were made on information sharing.

Mr Putin's visit has given new energy to our relations. Russian-Turkish trade dropped to $23 billion in 2009 due to the global economic downturn. But, as I said during my visit, and as my good friend and I agreed in Moscow, our goal is to boost trade to $100 billion over the next five years. We are determined to meet this goal, and Turkey is ready to make every effort to do so.

Mr Putin and I reaffirmed our political will during today's talks, and we will take further steps to meet the goals we have set for ourselves. We have already taken steps on politics, defence, culture and the economy that will accelerate this process.

An important even has taken place in the region, and we just now had the chance to discuss these sensitive issues. A focus of our talks was the recent attack on a ship carrying humanitarian aid to Gaza. We welcome Russia's support on this issue.

When I spoke on the phone with Mr Putin, we found common ground on many issues. Regarding the attack, Russia clearly stated its position. I would like to thank Mr Putin personally and on behalf of the Turkish people.

The incident was a test of people's conscience. The only purpose of the flotilla was to deliver aid from 32 countries. It was carried out by civilians who were unarmed. They were attacked. Nothing could justify such actions.

We have received condolences from the leaders of many countries. We are grateful to them. The chorus of voices demanding justice grows stronger. People are speaking out in favour of a just world. Turkey will use every international platform to defend the victims of Israel's attack. We will be consoled only when justice is done.

I have discussed this with my dear friend today, and I would like to express my deep gratitude to him once again. Welcome to our country! With that I yield the floor to Mr Putin.

Vladimir Putin: Mr Prime Minister, I would like to thank all our Turkish friends for the invitation, and especially my personal friend, Mr Erdoğan.

Today we are meeting as part of the Conference on Interaction and Confidence-Building Measures in Asia. Confidence is always important, but it is especially important against the background of the recent tragedy, the attack against the humanitarian convoy.

Russia and Turkey provide an example to all other countries of how to build confidence between nations. Confidence must be based on cooperation between governments as well as people in a broad range of areas.

We do everything we can to boost cooperation between Russia and Turkey. We have indeed achieved good results in energy, industry and agriculture.

Suffice it to say that Russian grain sales to Turkey more than doubled last year (up more than 100%). Turkish imports to Russia are growing too. We are initiating joint projects in sensitive spheres, for example military-technical cooperation. We are working to maintain peace and stability in the Black Sea region and to ensure that it is governed by international law.

These are the issues the prime minister and I discussed in detail today. I fully agree that trade between our countries will recover from the recent decline caused by global economic problems and will soon return to pre-crisis levels. I am confident that we will not only reach pre-crisis levels but exceed and meet the $100 billion goal Mr Erdoğan has mentioned.

I have no doubt that we will. We are doing a lot to improve relations in all priority areas.

As you know, a Russian delegation led by President Dmitry Medvedev recently visited Turkey. His visit was highly productive.

Our countries reached an important nuclear energy agreement. We had been involved in negotiations for a long time - for several years in fact - before we were able to put the matter to rest a month ago. We just agreed to complete the necessary formalities within our governments as soon as possible so as to get these projects underway.

We will approach other issues in a similar way. I am confident that Russian-Turkish relations have a bright future. In any case, our two governments will do everything in their power to achieve this.

Thank you very much for your attention. And I would like to thank the prime minister and the president of Turkey again for the invitation.

Question: On Monday, Turkey and Azerbaijan signed an agreement on the Shah Deniz-2 gas field.

I have a question on this issue for the prime minister of Turkey. To what extent will this allow Turkey to replace Russian gas deliveries and fill the Nabucco pipeline to capacity?

And this question is for Mr Putin. Don't you think this will make things more difficult for the South Stream project? By which I mean the growing competition with the Nabucco project. Thank you.

Recep Tayyip Erdoğan: As you know, gas is currently being supplied from Azerbaijan. There are also plans to import gas from Shah Deniz. Given our gas needs, this is not a large amount.

Gas from the Russian Federation meets a considerable share of our demand. At present, 64 out of 81 Turkish provinces have received natural gas. We hope that the remaining 17 provinces will get natural gas in the upcoming period. Moreover, industry will start using natural gas more actively. There is substantial demand for natural gas. We plan to use natural gas in households and in industry. Consequently, there will be no changes or fluctuations in natural gas imports from Russia, and this will not affect Blue Stream in any way.

Vladimir Putin: We are glad to see our partners diversify their sources of raw materials. We see no problem here. The amount of gas supplied from Shah Deniz does not compare with Russian supplies. We supply gas to Turkey through a pipeline on the bottom of the Black Sea, the Blue Stream pipeline, through Ukraine and then on through this corridor. Turkey's energy needs will continue to grow as its economy grows. This is the first point.

Second, each year we make up for the gas Iran fails to deliver to Turkey. Russian gas won't be replaced so long as there are winter gas shortages on the Turkish market caused by insufficient deliveries from other partners. And finally, transport capabilities are also important. This, too, acts as a limiting factor, because a sufficiently ramified pipeline-transport infrastructure is still lacking.

As far as Nabucco is concerned, I have repeatedly said and will continue to say that if someone completes an economic feasibility study of this project, and if this study can form the foundation of this project, then Godspeed, let the project move forward. But we realise that Azerbaijani gas will not be enough to fill the Nabucco pipeline to capacity. Moreover, the prime minister of Turkey and I have previously discussed the possibility of building the Blue Stream-2 pipeline, as well as additional trunk pipelines and pipeline offshoots along the bottom of the Black Sea, from Russia directly to Turkey. This could involve gas deliveries to third countries. These are all viable projects backed by the necessary raw materials and resources. We will continue to work in this direction.

Question: A question to Mr Putin from the Turkish media. You have mentioned humanitarian aid regarding the attack on the flotilla. What kind of support do you plan to give Prime Minister Erdoğan on this issue? The Iranian nuclear programme is another issue. Have you met with the president of Iran? Iran and Russia maintain a close relationship. Regarding your intentions in the UN Security Council, what is your position on the Iranian nuclear programme?

Vladimir Putin: We promptly expressed our concern over the attack. Not only this, we condemned the attack on the humanitarian convoy. Our permanent representative to the United Nations made an unequivocal and direct statement on this issue. We said we condemn the attack. It is particularly deplorable that the attack was carried out in neutral waters. Such actions against civilian ships are unacceptable. Carrying out such actions in neutral waters raises special questions and, naturally, calls for careful examination and investigation.

We regret the loss of life, and we hope that nothing like this will ever happen again.

Mr Erdoğan and I have discussed this issue today in great detail. We understand the feelings of the Turkish leaders, including the prime minister and the president, as well as the entire Turkish nation. We would like to express our condolences regarding the loss of life. And this is the position we will take at the UN Security Council. It has already been formulated.

Regarding Iran's nuclear programme, we are actively working with the entire international community to address its concerns over Iran's nuclear programme.

The president of Iran has arrived here, and we will surely see each other during the course of the conference. I believe that we will have a chance to discuss these issues provided my Iranian colleague and partner wishes to do so. But I would like to say that we played an active role in drafting the resolution of the UN Security Council. As you know, our official representatives have spoken on this repeatedly, and the resolution has essentially been coordinated.

We do not think that these resolutions should be excessive and put Iran and the Iranian leadership, as well as the entire Iranian nation, in a difficult situation that hinders the development of the civilian nuclear power industry.

Moreover, I would like to inform you that we will complete the nuclear power plant in Bushehr, Iran this August. The plant will be officially opened and commissioned in August, after which it will begin operating.

Question: The Azerbaijani TV channel ANS TV has a question for Mr Putin. You said many times that resolution of the Karabakh conflict depends on Azerbaijan and Armenia. Azerbaijan accepts the Madrid agreements, but Armenia does not. It's clear then that the situation does not depend on Azerbaijan and Armenia. Can the Karabakh conflict be resolved?

Vladimir Putin: My position on this has not changed, and I'll repeat it here: I am absolutely sure that only the heads of these countries can resolve this kind of complex and sensitive intergovernmental problem. It is their responsibility alone. Only these states and these peoples, through a constructive dialogue, can reach acceptable solutions and compromises. And only Azerbaijan and Armenia can say what is acceptable to them. All other participants in this process can act only to guarantee compliance with any agreements that are made. This is how Russia intends to act.

As for Madrid agreements - these are not just agreements, they are modified agreements. And it is necessary to be patient and try to coordinate these positions. There is nothing out of the ordinary here. These issues are complex, and the two countries must be patient and seek solutions.

Both Russia and other participants in this process are ready to help, but we cannot take Armenia or Azerbaijan's place. Russia will not take on any additional responsibility to press the countries to act, only to be viewed as guilty of some misdeed by one or both of the countries later on.

Our relationship with Azerbaijan and Armenia spans centuries. We do not want to be seen as having pressured one side to accept an unfair outcome. I would like to stress that we can only guarantee any agreements that are reached.

Question: A question for Mr Putin from the newspaper Kyrgyzstan Ayat: The situation in the Republic of Kyrgyzstan has recently become unstable. The new Kyrgyz government cannot formulate a clear position on the Manas air base. Will you act to drive the U.S. air base from Kyrgyzstan? Kyrgyzstan and Russia have a centuries-old relationship.

Vladimir Putin: Whether to allow foreign military bases on one's territory is a decision for each individual country. In this case, it is a decision for the Kyrgyz government. The decision it takes will be final.

Question: The Bloomberg agency. I would like to ask both prime ministers a question about Blue Stream-2. There were plans to supply gas to Turkey and transport it through Israel on to the Indian Ocean. There were plans to supply gas there. Was the project suspended due to the recent developments with Israel? What can you say about the future of Blue Stream-2?

Vladimir Putin: We regard Blue Stream-2 as an additional opportunity to supply gas to the growing Turkish market, primarily crude hydrocarbons, and possibly as a transit line for shipments to third countries. This is not limited to Israel. It involves other nearby countries as well, such as Syria and Lebanon.

Regarding the tragic incidents we have been discussing today, I must say here that the project to supply gas to Israel was suspended for another reason: According to available information, Israel has discovered gas in its continental shelf. And, most likely, we will not extend Blue Stream to Israel out of economic considerations.

I would not speculate on any issues related to the loss of human life right now. That is way off the mark. These issues are not connected in any way. I would like to stress that Israel most likely won't have any need for this gas, and this is the main reason.

As for supplies to other countries in the regions, we should consider the economic feasibility of the project.

Recep Tayyip Erdoğan: Thank you, Mr Prime Minister. Thank you for your attention.