The visit took place as Russia's neighbors are reassessing their relations with Moscow in the wake of its brief war with Tbilisi and recognition of two separatist Georgian provinces as independent states last month.
The two presidents discussed Azerbaijan's own breakaway region of Nagorno-Karabakh, which is backed by Armenia, they said. Medvedev voiced support for direct talks between Azerbaijan and Armenia, while Aliyev said he saw "good prospects for the situation to improve," Interfax reported.
Armenian President Serzh Sargsyan and Medvedev have met twice this month, in Sochi and during a meeting of the Collective Security Treaty Organization.
Aliyev said problems in the region must be resolved through dialog and extolled his country's relations with Russia. "If everybody had such neighborly relations as Russia and Azerbaijan have, not only conflicts, but also misunderstandings wouldn't take place at all," he said.
Medvedev visited Azerbaijan on July 3 in one of his first foreign trips as president, underlining the priority that Moscow has given to ties with the energy-rich country. Gazprom chief Alexei Miller made an offer then to buy Azeri gas at market prices.
Medvedev said Tuesday's discussions involved energy cooperation. A spokeswoman for Gazprom could not say immediately whether the company's offer to purchase Azeri gas made any progress at the talks.
Azerbaijan, which seeks a balance between the United States and Russia in its foreign policy, has yet to respond to the energy offer. U.S. Vice President Dick Cheney went to Baku on Sept. 3 to reiterate that his country wants more Azeri oil and gas to bypass Russia on its way to international markets.
Medvedev and Aliyev met to discuss relations under the new conditions set by the conflict with Georgia and Western criticism of Moscow, said Vladimir Zharikhin, deputy director of the CIS Institute, a think tank that studies the loose group of former Soviet republics known as the Commonwealth of Independent States.
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