TEHRAN -- Russian President Vladimir Putin met on Wednesday with leader of Azerbaijani Muslims Gadzhi Allahshukyur Pasha-Zade.

During the meeting, Putin said that he appreciated a wise and balanced position of the religious leaders in Azerbaijan and all over the Caucasus.

He added that in many cases it was religious leaders that prevented many regional conflicts from developing into religious feud, an IRNA report from Baku said.

The people living in the Caucasus, characterized by its unique ethnic and religious palette, have always had special respect for spiritual leaders, and your efforts toward settlement of the regional conflicts are of great importance, Putin said, adding your position has weight and is therefore very efficient.

The Russian president recalled a meeting he had two months ago in Moscow with the leader of Azerbaijani Muslims, the patriarch of Moscow and all Russia, and the Catholicos of all the Armenians. Putin said that the meeting was indicative of the fact that the religious leaders were interested in the soonest possible solution of the existing problems.

President Putin pointed out that Russia will accept settlement of any regional conflict, including that in Nagorny Karabakh, should it agree with the parties to the conflict.

The Azerbaijani religious leader expressed his gratitude for an opportunity to meet with the Russian president for the second time over the past two months, and stressed that Putin's visit to Azerbaijan would contribute to the development of relations between Russian and Azerbaijan.

He pointed out that the Muslims of Azerbaijan were glad at the new bilateral documents signed during the visit of the Russian leader, and first of all at the Baku declaration of Putin and Aliyev.

Meanwhile, a Reuters report quoted Putin as saying on Wednesday he wanted more military cooperation with Azerbaijan, a country which has viewed Moscow's ties with arch-rival Armenia with deep suspicion.

In a further sign of his desire for friendly links with Azerbaijan, Putin also said he saw no need to slap a visa regime on the country, in contrast to the travel restrictions recently imposed on another Caucasus country, Georgia.

Putin has tried to increase Moscow's influence in its former satellites and Azerbaijan is just the latest of several former Soviet nations he has visited.

"Military cooperation between Russia and Azerbaijan has been showing signs of progress lately. I think our contacts in this area may be intensified," Putin told the Azeri Parliament on the second day of his first visit to Azerbaijan.

"Such cooperation reflects the two states' security interests and is not targeted against third countries," said Putin, who was later due to have another round of talks with veteran Azeri President Heydar Aliyev.

Azerbaijan has accused Russia of favoring Armenia during the Nagorno-Karabakh conflict, which erupted in 1988 when ethnic Armenians tried to secede from Azerbaijan.

Putin pledged to be a guarantor of any agreement between the nations over Karabakh. "We are ready to accept any decision which suits both countries," he said.

The Caucasus, a volatile region which has seen several bloody conflicts since the breakup of the Soviet Union, has been a source of worry for Russia, and relations with Georgia have gradually worsened over the last year.

Russia's interest in Azerbaijan is economic as well as political. The Caspian Sea state has oil reserves which Russian companies are interested in helping to exploit. Many non-Russian firms are already in the Azeri market.