Russian President Vladimir Putin and Ukrainian President Viktor Yushchenko have played down their differences following a key meeting in Kiev.
Relations soured in the wake of Ukraine's disputed poll
Mr Putin is in the Ukrainian capital for the first time since a pro-Western government took control last year.
Relations between the two neighbours were strained after Russia endorsed the defeated candidate in Ukraine's disputed election in December.
"We have no unanswerable questions," Mr Yushchenko told correspondents.
His Russian counterpart said problems between the neighbours "simply do not exist".
It was the two leaders' second meeting; Mr Yushchenko had visited Mr Putin in the Kremlin a day after his inauguration.
Mr Yushchenko said that his country's foreign policy "is not aimed against anyone" and that Russia is Ukraine's "eternal partner".
Closing Ukraine's trade deficit with Russia was a priority, he added.
Mr Putin said he had urged the Ukraine not to abandon the idea of a common market - the Single Economic Space - with Russia, Belarus and Kazakhstan.
"I felt there was interest in this on the Ukrainian part," he told correspondents, pointing out that there was $17bn-worth of trade between Russia and Ukraine last year.
The presidents also discussed the conditions for the continuing deployment of the Russian Black Sea Fleet in Ukraine, as well as a joint gas consortium to operate Ukrainian pipelines and the disputed Russian-Ukrainian border in the Azov Sea.
Mr Yushchenko said he had proposed a compromise on the Azov Sea border which Mr Putin said would be referred to experts.
The arms trade, the separatist Trans-Dniester region in Moldova and bilateral language and religious issues were also covered, Ukraine's TV 5 reports.
The presidents announced they were to set up an inter-state body - the Putin-Yushchenko commission - as a forum for regular dialogue.
At talks with EU leaders on Friday, Mr Putin said he would not interfere in Ukrainian politics.
The BBC's Helen Fawkes in Kiev says that while the countries are now heading in different directions politically, they regard each other as important trading partners.
She says Ukraine's new pro-Western leader faces a difficult task of working towards European integration while at the same time building a better relationship with Russia.
The Russian president made two highly-publicised trips to Ukraine during the election campaign, to show his support for the government candidate Viktor Yanukovich.
Despite mass protests and claims of election fraud, Mr Putin congratulated Mr Yanukovich after his initial victory at the polls.
The disputed ballot led to what has become known as the "orange revolution".
Mr Yushchenko later won a re-run of the vote, pledging closer ties to Europe.