Merkel and Putin view exhibition of disputed art
Germany's Angela Merkel and Russia's Vladimir Putin have visited an exhibition featuring art looted from Germany by the USSR in World War II.
Reports said Mrs Merkel had intended to use the visit to the Hermitage Museum in St Petersburg to ask for the items to be returned.
But she toned down her remarks saying that Russia and Germany would continue talks about the issue.
Mr Putin said the war art issue was "very sensitive".
He said it was "hardly worth starting an argument now" and added that the two sides should seek "ways to resolve it".
Mr Putin denied there had been any suggestion of cancelling the visit.
"We had not cancelled anything, we just wanted to see if we would have enough time," he told reporters at a news conference with the German leader.
Mrs Merkel, who was in St Petersburg to address the annual St Petersburg International Economic Forum, said it was an important step that the works were now on public display for the first time.
"It gives us great happiness that we can see all of them today. We will continue dialogue on all questions regarding valuables brought from Germany,'' she said, according to the Russian Interfax news agency.
The two countries are in dispute over whether works of art taken by Soviet forces in the war should be returned to Germany, the BBC's Steve Evans reports from Berlin.
No-one quite knows how much art was looted from German collections as the Soviet Army closed in on Berlin but it certainly runs into thousands of paintings and sculptures, our correspondent says.
One gallery alone in Berlin lost 441 pictures, including works by Rubens and Caravaggio.
The new exhibition at the Hermitage Museum includes work previously in German museums.
The Russian position has in the past been that the works were paid for with the blood of Soviet soldiers, our correspondent says.
Russian officials have also pointed out that Napoleon's troops looted works from Russian collections, works which ended up in the Louvre.
Furthermore, Nazi forces destroyed or looted Russian art treasures during the invasion of the USSR.
Art taken from Nazi Germany has been shown in Moscow on several occasions in recent years such as a display at the Pushkin State Museum of Fine Arts in 2007 and a Moscow Museum of Architecture event in 2003.