Russia`s state gas giant Gazprom and Ukraine on Tuesday signed an agreement to settle a gas payment dispute that had raised fears in Europe of possible disruptions in supplies. "An agreement on settling the debt for gas to Ukraine has been signed," Gazprom said in a statement after a meeting between Gazprom CEO Alexei Miller and Ukrainian Energy Minister Yury Boiko. Under the deal, the debt will be paid in full by November 1, Gazprom said. Gazprom last week had threatened to cut off supplies to Ukraine this winter if the ex-Soviet country did not pay a 1.3-billion dollar (927-million euro) debt for supplies in 2007. Analysts said that the timing of the threat may have been linked to parliamentary elections in Ukraine on September 30 in which pro-Western parties won a razor-thin majority over their Moscow-backed rivals. Russia cut off gas to Ukraine last year in another payment dispute, leading to disruptions in supplies to several European countries that depend on the same pipelines running from Russia through Ukraine. The European Union had urged the two sides to come to an agreement. Meanwhile Ukrainian Prime Minister Viktor Yanukovych, who favours closer ties with Russia, flew to Moscow on Tuesday for energy talks with his Russian counterpart Viktor Zubkov and President Vladimir Putin. The visit comes as Yanukovych`s Regions Party holds tense coalition talks in Kiev with the pro-Western parties -- Our Ukraine and the Yulia Tymoshenko Bloc -- that won a majority in the elections. Yanukovych`s longtime rival, President Viktor Yushchenko, has urged all parties that won seats in the parliament to help form a coalition by the end of this week and to put an end to their feuding. Critics have accused Russia of using gas supplies as a political weapon against Yushchenko, who aims to wrest his country from Russia`s orbit and towards membership of the European Union and NATO. Russia`s First Deputy Prime Minister Dmitry Medvedev, who is also chairman of Gazprom, rejected such accusations on Sunday when he said that the price charged by Russia for its gas was based only on market principles. Negotiations on gas prices "regularly provoke disputes that we do not understand. Sometimes it`s even hysteria," Medvedev said. "Our partners need to get used to the idea that you have to pay for the gas and pay in time, in accordance with contracts signed," he added. At the meeting with Zubkov, Yanukovych welcomed the debt agreement and said that Ukraine could boost its role as a transit country for oil and gas supplies from Russia to Europe. Almost all of the debt to Russia will be paid back by transferring ownership of natural gas stored in underground reservoirs in Ukraine to Gazprom, Zubkov said at the meeting.