UPDATE 2-EU hopes to resolve dispute with Russia by summit

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By David Brunnstrom

LUXEMBOURG, April 23 (Reuters) - The European Union said on Monday it hoped to resolve a dispute holding up a wide-ranging partnership pact with Russia before a summit next month, despite the failure of weekend talks with its main energy supplier.

But ahead of EU-Russia talks in Luxembourg, some EU diplomats said Russia's refusal to end a 16-month-old ban on imports of Polish meat showed Russia was not interested in a pact supposed to cover energy, trade, economic cooperation and human rights.

The EU had been keen to start talks on the new pact with Russia by the May 18 summit to reinvigorate ties and ease European worries that Russia is using its vast energy resources as a political weapon.

"We have some work to do, but I hope very much that before long the issue will be resolved. In any case before the summit," EU foreign policy chief Javier Solana told reporters before talks with Russian Foreign Minister Sergei Lavrov.

German Foreign Minister Frank-Walter Steinmeier, whose country holds the rotating EU presidency, said talks would focus on how negotiations could be started as quickly as possible.

But Polish Foreign Minister Anna Fotyga was downbeat. "There is no progress," she said when asked if she expected a breakthrough.

One EU ambassador said the European side had done everything to clear the way for a deal when EU Health Commissioner Markos Kyprianou met Russian Agriculture Minister Alexei Gordeyev at the weekend.

"But we got a nyet from Moscow ... That tends to support the feeling we had -- namely that Russia doesn't want this strategic partnership," he said, adding:. "It's a fantasy to think one can pressurise Moscow."

EU officials said that while it appeared impossible to launch talks by the summit, they hoped they could at least announce the intention to do so when the leaders meet.

RELATIONS AT LOW POINT

"I am only cautiously optimistic I must say," EU External Relations Commissioner Benita Ferrero-Waldner said.

"We have to go on working and trying to get this ready and the last moment would be the summit."

EU Trade Commissioner Peter Mandelson set a grim tone before the talks with Lavrov by saying on Friday that EU-Russia relations were at their lowest point since the Cold War.

Mandelson, a Briton, urged both sides to take a long-term view. He said that while Europe needed guarantees Russia would not cut off energy supplies, it needed to understand Russia's perception of EU encroachment into its sphere of influence.

The two sides are at odds over the breakaway Serbian province of Kosovo, with the European Union backing a U.N. plan for its independence. Russia -- a veto-holding member of the U.N. Security Council -- says any plan must have the support of Serbia, bitterly opposed to Kosovo's independence.

Moscow, meanwhile, has been upset by U.S. plans to put an anti-ballistic missile system in Poland and the Czech Republic, former Soviet bloc states that are now EU and NATO members. (Additional reporting by Ingrid Melander and Yves Clarisse)

Keywords: EU RUSSIA/