UPDATE 2-Russia says reached deal with Georgia on WTO entry

* Agreement with Georgia is the last big hurdle to Russia's WTO bid

* Georgia says has not yet been informed

* Russia says agrees bilateral deal on goods trade

* Unclear when Russia could formally approve the deal

By Gleb Bryanski and Guy Faulconbridge

MOSCOW, Nov 2 (Reuters) - Russia removed the last major hurdle to its 18-year-old bid to join the World Trade Organization on Wednesday by agreeing to a compromise deal with Georgia, and it could now join the global trading club within months.

WTO entry would make Russia's $1.9 trillion economy, the biggest outside the 153-member club, more attractive to investors and cement Russia's integration into the world economy two decades after the fall of the Soviet Union.

Haggling between Russia and Georgia, a former Soviet republic which the Kremlin humiliated in a 2008 war, had held up Russia's entry which is supported by the United States and the European Union.

"We are happy that Georgia supported the draft agreement and that finally an agreement has been reached," Russia's WTO accession negotiator Maxim Medvedkov told Reuters by telephone.

There was no comment from Russia's most powerful man, Prime Minister Vladimir Putin, and no indication of when the deal could be formally approved.

Swiss mediators have been trying to hammer out a deal between Russia and Georgia, which could have vetoed Russia's bid, over the intricacies of trade in two tiny Georgian breakaway regions which Russia supports.

Georgia said it had not yet been informed of Russia's decision. "They have not given a final yes or no yet," Deputy Foreign Minister Sergi Kapanadze said by telephone.

If all goes smoothly, WTO trade ministers would approve entry this year and ratification by Russia's next parliament, to be elected in December, could follow in time for Putin's almost certain return to the presidency next March.

Russian WTO entry is the biggest step in world trade liberalisation since China joined a decade ago, and it would send a signal to companies and the gatekeepers of big money that Russia is at least starting to move closer to a rule-based system of doing business.

ENTRY AFTER 18 YEARS?

The WTO was once viewed by Moscow as an instrument of capitalist hegemony. The Soviet Union formally applied for observer status at the WTO's predecessor, the General Agreement on Tariffs and Trade (GATT), under Mikhail Gorbachev.

Russia, reeling from the collapse of the Soviet empire, applied to join in 1993 and Putin had said he wanted Russia inside the WTO since his first year as president in 2000.

But elections mean that Putin, who derailed the accession process in 2009, is focused on opinion polls rather than the details of international trade. There is little to gain in voter terms from overt support for WTO entry.

The World Bank estimates WTO entry could increase the size of the Russian economy by 3.3 percent in the medium term and 11 percent in the long term.

Traders say a clear indication of a deal for entry could boost Russian stock markets by more than 5 percent, a speck of potentially positive news for investors amid the volatility unleashed by the euro zone debt crisis.

But there are influential opponents within Russia who say international companies will use their clout to stifle domestic producers. Russia says it has successfully fended off attempts to split up gas behemoth, Gazprom , the world's largest natural gas company.

GEORGIA

Georgia was under intense pressure from its Western allies to do a deal with Russia.

Georgia's army was humiliated in August 2008 when it tried to reconquer the breakaway region of South Ossetia, prompting a Russian counter-attack which crushed it in five days.

Russia promptly recognised South Ossetia and another breakaway region, Abkhazia, as independent states. The two regions are the focus of the complicated negotiations in Geneva over a deal to get Georgia behind Russia's bid.

Under a proposal worked out with Swiss mediation, Medvedkov said Russia had accepted the use of an independent company to audit data on trade between Russia, the two rebel regions and Georgia.

"Russia and Georgia, as members of the WTO, would have to pass this data to an integrated database," said Medvedkov, who has led Russia's negotiations on WTO entry since 2001.

If Russia formally approved the agreement, it would be the first deal between Russia and Georgia since a ceasefire agreement brokered by France in 2008 to end the war.