"In political contacts it has been noted that one could see it as a political package and I'm quite confident that on both issues we will see movement" in the first half of 2004, Verheugen added.

Russia shocked the EU last year by suggesting it may not ratify Kyoto, an international treaty to reduce emissions of gases blamed by many scientists for warming the atmosphere.

Russia can effectively stop the treaty coming into force if it does not ratify after the United States pulled out. The treaty must be ratified by developed nations accounting for 55 percent of air pollution to come into force. Russia with 17 percent of emissions holds a casting vote.

Some EU states have suggested that if Russia does not ratify the treaty, the bloc should rethink its own policy on restricting carbon emissions, which some fear could make European industry less competitive by increasing its costs.

Russia, the world's second largest oil exporter, has been seeking WTO entry for more than a decade. The EU is one of the most important power brokers at the Geneva-based organisation and is Russia's main trading partner.

Verheugen said there was no "formal, legal" link between the two issues but suggested Russia itself saw the two as related.

"I understand it as an attempt to get us to relax some of our demands for Russian WTO entry and then to compensate for that by signing the Kyoto protocol," Verheugen said.

In the past, negotiations between the EU and Russia have stalled over Russian gas company Gazprom's export monopoly and the big difference between prices charged for domestic and foreign energy consumers.