An American official said Mr Clinton urged Mr Yeltsin to take decisive steps within the next few days in order to reassure the financial markets and improve prospects for the release of the next instalment of a multi-billion dollar loan from the International Monetary Fund.

BBC correspondent Alan Little: "A tidal wave of social unrest is threatened"

"This was not a phone call about money," said the White House spokesman Mike McCurry.

"It was a phone call about doing the things necessary to right an economy that has been struggling to move forward."

Another US official, who asked not to be identified, said that President Clinton felt that the onus was on Moscow to take further action on its economy, rather than on the West to provide more cash.

The two presidents spoke for 40 minutes at the end of a week of wild gyrations in Russia's markets.

On Thursday, trading on the Moscow stock exchange had to be suspended after share prices lost more than 11% within one hour.

Calm restored

BBC Moscow Correspondent Rob Parsons: "Is the Duma really prepared to have another emergency session?"

Financial markets calmed down on Friday and it seems, at least temporarily, that the Russian economy has stepped back from the brink.

Traders reacted to comments by a US official who said that the G7, the world's seven richest countries, had not given up on Russia yet.

Yeltsin promises to stand firm

Before the markets opened Mr Yeltsin ruled out a devaluation of the rouble and called on the Duma, the lower house of the Russian parliament, to convene an extraordinary session next week to deal with the crisis.

The leading Russian Trading System (RTS) index finished 13.67% up on Thursday's close and well clear of the two-year lows set with alarming regularity earlier in the week.

Soros warning

Russian banks are having trouble with dollar loans

The markets had reacted sharply after billionaire financier George Soros warned that the turmoil in Russia's financial markets had "reached a terminal phase."

Mr Soros, one of the world's most influential investors, wants the rouble to be pegged to the US dollar or a European currency.

In a letter to the Financial Times newspaper, he also called on G7 to provide a further $15bn to shore up confidence in the country's troubled financial system.

He believes that the best way to resolve the crisis is for a 15-25% devaluation of the rouble and the setting up of a currency board.

Crisis despite bail-out

Russia's economic turmoil comes despite the promise of a $22bn financial bail-out lead by the International Monetary Fund.

Russian shares have collapsed in recent months amid fears that the government will struggle to pay off its debts.