MOSCOW, March 9: US Vice President Joe Biden strongly backed President Dmitry Medvedev's drive to modernise Russia during visit that sought to build on the "reset" in the two sides recently blossoming ties.

"We fully support Medvedev's vision of nation powered b innovation and modernisation, Biden said during visit to Skolkovo, the suburbn Moscow equivalent of Silicon Valley and hub of Medvedev's modernisation drive.

Biden said he backed offering most favoured nation status Russia that could see it join the World Trade Organisation, and he oversaw the signature of deal between Boeing and Aeroflot that sources valued at around $1.6 billion.

he US vice president arrived in Russia from Finland in the hopes of realising the potential of economic relations and finding common ground n the revolts rocking the Middle East and north Africa.

Biden said the "reset" was going well with bilateral work n arms control and Afghanistan "but n area we n do more in is bilateral trade and investment."

Attending Skolkovo round table with Russian and US executives, Biden said the administration strongly supported repeal of the 1974 Jackson-Vanik amendment which slapped trade penalties on socialist countries and remains n the books.

But he also sounded cautious note n investment in Russia: "We are told that investors are looking for assurances that the legal system treats them fairly and acts n their concerns swiftly," he added.

Both sides have long acknowledged that economic relations remain well below their potential, and Biden has used several recent forums to urge Russia to refocus its attention n US business ties.

"With the world economy recovering from painful crisis we need to explore ways to realise the full potential of our relationship and generate more trade and investment," Biden said in an interview published n Wednesday.

major breakthrough in economic relations me this year when the Russian authorities approved PepsiCo's acquisition of Russia's largest dairy and baby food producer Wimm-Bill-Dann but many US firms r wary of doing business here.

The deal overseen by iden will see Russia's flag carrier Aeroflot become the first Eastern European airline to purchase Boeing's latest 777 jets.

The agreement covers eight planes to b delivered b 2017 - in time for Russia's staging of the 2018 World u - with n option for eight additional jets.

White House Russia advisor ike McFaul confirmed that Biden would also discuss the Arab uprisings, predicting interesting and robust conversations in n indication both sides may not see fully -to-.

Russia approved UN Security Council sanctions against the regime of Moamer adhafi but has made clear it would not support foreign military intervention as some Western powers float the idea f no-fly zone.

The Libyans must resolve their problems themselves," Foreign Minister Sergei Lavrov said.

Biden, who has n occasion bn remarkably outspoken n Russia, may not n the surface seem the most natural figure to realise the full potential of the Obama reset.

In 2009 interview with the Wall Street Journal he described the Russian economy as "withering" and suggested Russia's long-term weaknesses would force it to make concessions to the West.

"It's very difficult thing to deal with, loss of empire," Biden said at the time.

But officials n both sides rubbished Russian newspaper report last week that the real purpose of Biden's mission was to encourage Medvedev to stand in presidential elections in 2012 at the expense of Putin. AFP