Reuters cited Mr Kurbanguly Berdymukhamedov president of Turkmenistan as saying that Turkmenistan and Azerbaijan, two Caspian states disputing the ownership of several offshore oil and gas fields, may find a compromise solution.

Mr Berdymukhamedov had earlier threatened to take ex-Soviet peer Azerbaijan to an international arbitration court over the issue and said Turkmenistan would build a navy in the Caspian.

Turkmenistan has objected, in particular, to the development of Azeri and Chirag gas fields. But on Thursday Mr Berdymukhamedov said he preferred a diplomatic solution. He said that "Azerbaijan is our good neighbour we have always been and will remain brothers."

He added that "We will continue diplomatic dialogue on this issue which may lead to a compromise."

Russia, Iran, Turkmenistan, Azerbaijan and Kazakhstan have long argued about the delimitation of the Caspian Sea, which contains vast oil and gas deposits. The arguments centre on whether the Caspian is a sea or an inland lake.

(Sourced from Reuters)