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President Vladimir Putin, on the first Russian state visit to Britain in 130 years, has signalled he wants to bury past differences on Iraq and focus on luring foreign investment into the Russian economy.

Putin moved to dispel suspicion that he still sought to score political points out of the Iraq issue at a Buckingham Palace state banquet on Tuesday night after arriving on a four-day visit to a sumptuous royal welcome.

Startling his audience by speaking in English, he extended to Queen Elizabeth II his sympathies for the deaths of six British soldiers killed in Iraq earlier in the day.

"It is clear to everyone that in spite of the differences that existed before, today we need to act jointly," he added.

Putin was due to travel up to Scotland for the day on Wednesday, returning to speak in the City, London's financial heart, in the evening.

It is the first such visit by a Russian head of state since Tsar Alexander II sailed to Britain in 1874.

The British monarch had earlier broached the Iraq issue -- potentially divisive since Russia opposed the US-led war in which British troops fought -- by referring to the two countries' "significant differences" earlier this year.

"Now we are able to look forward together firmly in agreement on the route we have decided in the United Nations," she said in a speech of welcome to Putin at the banquet.

Putin's remarks suggested he wanted now to find common ground on handling postwar Iraq -- even though in late April he had publicly taunted British Prime Minister Tony Blair over the failure to unearth any weapons of mass destruction.

The issue is even more sensitive now for Blair, as he faces a parliamentary inquiry and falling public credibility over allegations he hyped up evidence of Saddam Hussein's weapons.

BOOST TRADE, ECONOMIC TIES

Foreshadowing a pitch he may make to British business later in his visit, Putin told the banquet that "political interaction...allows us to strengthen our trade and economic relations."

"The United Kingdom holds here many leading positions," he added.

He will meet Blair privately for only half an hour during his visit, though two men will have other opportunities to chat at royal ceremonies and an energy conference.

Popular at home, Putin, on current form, seems certain to be re-elected in March next year.

But he is nonetheless vulnerable on Chechnya where he has faced international condemnation for the misconduct of some Russian soldiers in the breakaway region. The United States is also annoyed by Russia's nuclear cooperation with Iran.

He risks more criticism for the closure at the weekend of Russia's last independent television station.

But his visit may bring finalisation of a $6.75 billion deal, in which oil company BP would buy a 50 percent stake in TNK, Russia's third largest oil company.

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