MOSCOW, May 10 ??“ Russia indicated Wednesday it would use carrot-and-stick policy to keep its neighbors within the Commonwealth of Independent States after Ukraine and Georgia had suggested they may quit the alliance.

Russian President Vladimir Putin said his government was ready to approve a more liberal trade regime by apparently removing trade barriers for alliance members, while non-members would probably face more restrictions.

"Russia is prepared to announce the ultimate result of this quest directly and clearly: the creation of an optimal economic system that would ensure the efficiency of each [CIS] member,??? Putin said in a key speech.

The comments may be a sign that Russia has been seeking to change its policy after harsh trade sanctions against Ukraine and Georgia had forced them to start talks over quitting the alliance.

Russia banned $800 million worth imports of meat and dairy products from Ukraine and completely prohibited imports of Georgian wine and mineral water, the country??™s main exports, apparently trying to punish them for their pro-Western foreign policy.

Also earlier this year Russia has doubled natural gas prices for all its neighbors except Belarus, and briefly suspended gas supplies to Ukraine and Georgia underscoring a major dispute.

The sanctions pushed Kiev and Tbilisi to start consultations on Sunday on whether to quit the CIS, an alliance that had been created in 1992 to replace the former Soviet Union.

The departure of Ukraine and Georgia, the two most vocal critics of the CIS, could prompt exodus by other countries from the Russia-led alliance. Such development is viewed by analysts as a setback for Moscow, which has been persistently seeking to strengthen its geopolitical role.

???I repeat, relations with our nearest neighbors was and remains a very important area of the Russian Federation's foreign policy," Putin said during his annual address to the Federal Assembly.

Meanwhile, the departure of Ukraine and Georgia, the countries that have been also seeking to join NATO, a bloc that Russia views as a military threat, would most likely lead to significant tensions, according to a senior Russian lawmaker.

???There would be nothing good for the people of these two countries,??? Andrei Kokoshin, the head of the CIS committee in the State Duma, the lower house of Russian Parliament.

???On the contrary, this would set a barrier that would be very hard to overcome. We are talking about economic and political issues,??? Kokoshin said. ???These countries would not become part of the West, but they would not be part of the CIS either.???

Ukraine and Georgia are members of GUAM, a regional group that also includes Moldova and Azerbaijan, and the significance of which is expected to increase, Ukrainian officials have said.

Ukraine will host a GUAM summit on May 22-23 to transform the group into a full-fledged international organization that will be headquartered in Kiev, the officials said. (tl/ez)