HELSINKI, Oct. 27 - President Viktor Yushchenko welcomed the elevation of EU-Kiev relations "to a higher level" after the 10th EU-Ukraine summit held on Friday in Helsinki, AFP reported.

The two parties signed an agreement easing visa restrictions for Ukrainians traveling to the EU's Schengen no-borders area and took steps towards an enhanced cooperation treaty.

The "new enhanced agreement" between Kiev and Brussels is set to replace an existing accord signed in 1998, which is due to expire in 2008.

The agreement will include a free-trade deal with the EU, which currently has 25 members but is due to take in two more next January. Talks on the deal are to begin in 2007, once Ukraine has joined the World Trade Organization

But the pro-Western Ukrainian president, seen as a foil to the country's more Russia-leaning Prime Minister Viktor Yanukovych, returns to Kiev without the "clear signal" he had hoped for regarding the future adhesion of Ukraine to the EU.

"We did not discuss the issue," Finnish Prime Minister Matti Vanhanen said, whose country currently holds the rotating presidency of the bloc.

"Ukraine is not ready and we are not ready. Ukraine has still reforms to do, let's be honest about it, and today EU member states are not ready to assume new membership obligations," European Commission President Jose Manuel Durao Barroso said.

"But this is not a negative signal to our Ukrainian friends, on the contrary," Barroso added.

Yushchenko said: "Our goal is to get our cooperation (with the EU) to the level of political association and economic integration.??? He added: "But the timescale (for membership) is something that must be negotiated."

Vanhanen, a keen exponent of EU enlargement, stressed that "all European countries that share European values and fulfill accession criteria have the chance to join."

"Our positions are pretty close," Yushchenko said.

The Ukrainian president highlighted a "landmark" visa agreement signed at the summit.

"This document will be felt by every Ukrainian. This is a marking event between Ukraine and the European Union," Yushchenko said.

The deal was "much awaited" by Ukraine, Yushchenko said, and would simplify procedures for issuing short-stay visas to Ukrainian citizens traveling to the EU, with the aim of issuing such visas in under 10 days.

The cost of the 30-day to three month visas for entry to the Schengen area would also be cut from 60 euros to 35 euros from Jan. 1, 2007, and made cost-free for students, journalists, the handicapped and senior citizens.

Kiev scrapped visa requirements for EU citizens in 2005.

A second immigration agreement signed on Friday set out procedures for EU and Ukrainian authorities on repatriation of illegal aliens.

Friday's summit was included talks on energy. EC president Barroso on Friday praised a deal reached between Kiev and Moscow on gas prices, opening the way to reduced tensions between the two countries and an easing of European concerns about the reliability of Russian energy supplies.

"We welcome all agreements made by Ukraine and Russia in terms of gas supply. In fact it seems that the situation in that matter is improving, we received some information from the president on that matter so we do not anticipate any problems, at least for this year, and this is good," Barroso said. (afp/ez)