Russia's Putin discusses union plan with Belarus

MOSCOW (Reuters) - Russian President Vladimir Putin discussed the process of creating a unified state with his Belarusian counterpart by phone on Tuesday ahead of a two-day meeting this week, the Kremlin's deputy spokesman said.

The Kremlin played down expectations of a major announcement at the meeting in the Belarusian capital, Minsk, after speculation in the Moscow media that a deal on a new state, headed by Putin, would be agreed.

"It will be a working meeting to continue to discuss all the aspects of the continuous integration between our two countries," the Kremlin's deputy spokesman said of the December 13-14 meeting between Putin and Belarus's Alexander Lukashenko.

"They discussed all the issues for the upcoming visit. Of course, our relationship is of an official nature and we will continue the process of mutual integration," Dmitry Peskov said.

Belarus and Russia concluded the first of several accords on forming a post-Soviet state in 1996 and will hold this week's meeting under the umbrella of the Supreme State Council of the Union of Belarus and Russia.

Peskov denied any significant announcement should be expected from the talks. "If you mean the sensational speculation, this is not the case."

On Friday, Belarus officials rejected a report on Moscow's editorially independent Ekho Moskvy radio station that Putin could create a new role for himself by heading a union of Russia and ex-Soviet Belarus after he quits next year.

Putin is barred by the constitution from taking part in a presidential election in March but is keen to maintain political influence after leaving the Kremlin.

Putin's preferred successor, Dmitry Medvedev, said on Tuesday he wanted Putin to become prime minister under him.

Lukashenko, accused in the West of crushing basic rights, has made creation of a merged state a policy priority while keeping in place many aspects of the Soviet-era command economy.

But plans for the merger remain vague, blocked by disputes over the years on how the state would be led, what to do about a common currency and, most recently, by Lukashenko's objections to steep increases in the price of Russian energy exports.

A customs and immigration union is in effect between the two neighbors.

(Reporting by Conor Sweeney; editing by Robert Woodward)