Germany's Angela Merkel in Moscow to mark end of WWII
German Chancellor Angela Merkel has attended a wreath-laying ceremony in Moscow to commemorate the Russians killed during World War Two.
Mrs Merkel and other Western leaders skipped a military parade in Red Square on Saturday over tensions with Ukraine.
Russian President Vladimir Putin said on Sunday that a Ukraine peace deal was progressing, despite problems.
More than 6,000 people have been killed since fighting began in April 2014 in Ukraine's Donetsk and Luhansk regions.
The Ukrainian government, Western leaders and independent experts say there is clear evidence that Russia is helping the rebels with heavy weapons and soldiers. Moscow denies it, insisting that any Russians serving with the rebels are "volunteers".
In an apparent conciliatory sign after boycotting the military ceremony on Saturday, the German chancellor flew to the Russian capital on Sunday to lay a wreath at the grave of the Unknown Soldier, close to the Kremlin.
Mr Putin, in a press conference after talks with Angela Merkel, said that a peace deal agreed in Minsk in February was moving forward. "Things have become more peaceful but there are still problems," he added.
Mrs Merkel said Russia's annexation of the Crimean peninsula had caused "a serious setback in our relations".
"However history teaches us that we must do anything possible to resolve conflicts, however, difficult they may be, peacefully and through dialogue," she added.
Germany played a key role negotiating the Minsk ceasefire agreement, which stipulated an immediate and full bilateral ceasefire and the withdrawal of heavy weapons by both sides.
However, the deal has since been violated many times.
Russia staged its biggest ever military parade on Saturday, to mark the 70th anniversary of victory over Nazi Germany, with thousands of troops marching across Red Square and new armour on display for the first time.
Chinese President Xi Jinping, President Pranab Mukherjee of India and UN Secretary General Ban Ki-moon were among more than 20 world leaders who attended the event.
But most Western leaders stayed away in protest against Russia's role in eastern Ukraine and its annexation of Crimea last year.
President Putin seemed to shrug off the Western boycott of the military parade. "Everyone we wanted to see was here," he said in televised remarks on Saturday.
Relations between Germany and Russia, which share strong economic and trade links, have reached a low point over the Ukraine crisis and subsequent EU sanctions against Moscow.
Angela Merkel has already said the EU plans to extend sanctions, unless there is progress on implementing the Minsk peace deal in full, says the BBC's Sarah Rainsford in Moscow.