YEKATERINBURG:  Russian President Dmitry Medvedev and German Chancellor Angela Merkel were set on Thursday to oversee a flurry of economic deals to further cement the Moscow-Berlin relationship.

German government sources say Siemens will sign 2.2-billion-euro (2.8-billion-dollar) order to supply Russian Railways with more than 200 trains for its regional network at the meeting in the Urals city of Yekaterinburg.

Siemens chief executive Peter Loescher will be one of the 25 business leaders accompanying Merkel to Russia and on to China and Kazakhstan.

While a spokesman for Russian Railways declined comment to AFP ahead of the signing, a Moscow-based spokesman for Siemens, Denis Perkin, confirmed the two companies would sign a contract but declined details.

He added Siemens also planned to ink an agreement to help Russia develop the Skolkovo high-tech hub outside Moscow -- Russia`s answer to Silicon Valley -- and another deal with state conglomerate Russian Technologies and RusHydro utility company.

During the summit -- the leaders` fifth encounter this year -- Medvedev and Merkel will discuss the setting up of "strategic alliances" between Russian and German companies in railway, aviation and energy industries, the Kremlin said.

"The common aim of the efforts being undertaken -- a quality improvement of business cooperation -- is in line with the modernization tasks Russia faces," the Kremlin said ahead of the bilateral summit.

Talks were to get underway at around 0330 GMT, followed by a news conference at 0730 GMT.

Medvedev this week told Russian diplomats that one of their top tasks was to help businesses forge economic alliances with the West as the Kremlin seeks to wean the country off oil and gas exports as its main economic motor.

"We need special modernization alliances with our main international partners," Medvedev said. "First and foremost with countries such as Germany, France, Italy, the European Union on the whole, (and) with the United States."

In Yekaterinburg, Medvedev and Merkel will also discuss Iran`s controversial nuclear programme, the Afghanistan conflict and Russia`s relations with the European Union.

Merkel, who nothetheless is considerably less cosy with Moscow than was her predecessor Gerhard Schroeder, may also raise the issue of human rights.

Thursday will be the first anniversary of the murder of journalist and human rights activist Natalya Estemirova, whose body was found in Ingushetia hours after she was abducted from Chechnya, in the Caucasus.

BDST: 1012 HRS, 15 July 2010