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MOSCOW, Jul (Reuters) - Russia hosted Libya's foreign minister on Wednesday, pressing ahead with efforts to engage Muammar Gaddafi's government in contrast to what it calls a counterproductive Western "policy of isolation".
Moscow says Gaddafi must give up power but has criticised Western military and diplomatic support for the rebels fighting to end his 41-year rule in Libya, where Russia had billions of dollars in energy, arms and infrastructure deals.
President Dmitry Medvedev, whose Africa envoy has met both rebels in Benghazi and top officials in Tripoli in recent weeks, said on Tuesday there was still a chance for compromise between the warring sides.
Russian Foreign Minister Sergei Lavrov and his Libyan counterpart Abdelati Obeidi met behind closed doors. Obeidi did not speak to reporters as he entered the Foreign Ministry.
Konstantin Kosachyov, a leading pro-Kremlin lawmaker who heads the international affairs committee in Russia's lower parliament house, said the Moscow meeting had been requested by the Libyan side and called for cautious optimism.
"It means that people who are still in power in Tripoli are ready to talk and not just suppress the resistance of the population with tanks or other heavy weapons," said Kosachyov, a member of Prime Minister Vladimir Putin's ruling party.
Kosachyov cast Russia's diplomacy as the "antithesis" of the approach of Western nations that have bombed state facilities and recognised the rebel Transitional National Council as Libya's legitimate government.
Such actions undermine diplomacy and "lead the negotiations track into a dead end," Kosachyov told reporters.
"With the full understanding that Gaddafi's regime really has no future and really cannot remain in power, the difference is that we are ready to continue talking to this regime in order to induce it into political contacts with the opposition and in the final result induce it to leave power," he said.
Dmitry Trenin, a foreign policy analyst and director of the Carnegie Moscow Center, said the visit suggested members of Gaddafi's circle are looking for a way out but amid the diplomacy, Gaddafi still holds the key to a resolution.
"He has had many opportunities to begin bargaining, to set out some conditions in exchange for leaving his position of power, but he has not used them yet," Trenin told Reuters.
Kosachyov, who often serves as an informal spokesman on Kremlin foreign policy, said Gaddafi and his government should be offered guarantees in exchange for leaving power but reiterated Russia would not take Gaddafi in.
For Gaddafi, "probably what can be discussed is some kind of guarantees of his personal security, the security of members of his family," said Kosachyov.
Trenin said members of Gaddafi's circle were eager to ensure their own future security.
"He may decide to die in Tripoli, but those around him do not want to die with him, they do not want go to the bottom with him," he said.