The Russian enclave of Kaliningrad, situated between Poland and Lithuania on the shores of the Baltic Sea, has marked 750 years since its foundation.
Celebrations have emphasised Kaliningrad's Russian ties
Russian leader Vladimir Putin hosted French President Jacques Chirac and German Chancellor Gerhard Schroeder at an anniversary celebration on Sunday.
They told Mr Putin that good relations between Russia and the EU were vital for world and regional stability.
Poland and Lithuania had criticised Russia for not inviting them.
The former German territory was annexed by Soviet forces in 1945 but has been separated from Russia since the collapse of the Soviet Union.
It is now bordered on all sides by European Union states.
"In its heart [this city] will always be called Koenigsberg," Mr Schroeder said, referring to Kaliningrad's pre-1945 existence as a German city, but denying any kind of territorial claim on the land.
Mr Putin defended the decision not to invite Polish and Lithuanian leaders, but to ask all of Russia's 89 regional governors to Kaliningrad.
"We are celebrating the 750th anniversary of Kaliningrad/Koenigsberg as an internal Russian event," he said.
Territory founded by Teutonic knights in 1255
Called Koenigsberg until renamed in 1946
Was capital of former German province of East Prussia
Was home to German philosopher Immanuel Kant
German population expelled after World War Two
Kaliningrad is the name of the territory and its capital city
Now surrounded by European Union member states
Banners and processions in the territory's capital emphasised its ties to Russia.
"We are not a Russian island, we are one Russia," read one hoarding.
The capital was spruced up for the celebrations with historical monuments restored and buildings given a new coat of paint.
But, says the BBC's Damian Grammaticas in Moscow, the decision not to invite the Polish and Lithuanian leaders has been construed as a deliberate diplomatic snub, adding a sour note to the celebrations.
Polish President Alexander Kwasniewski said it was no accident that delegates from Warsaw were not invited, while Lithuanian President Valdas Adamkus asked his government not to attend.
There have been calls in the territory for a referendum on whether it should become an autonomous republic within Russia, which would allow it to seek stronger ties with the European Union.
Both its neighbours - Poland and Lithuania - recently became members of the EU.
Disputes over the territory, such as regulations for transit to the rest of Russia, have clouded EU-Russia relations in recent months.