By Tamsin Smith BBC reporter in Rome

The two leaders clearly enjoy each other's company

On Wednesday, he will have an audience with the Pope before the summit officially begins.

This is the last EU-Russia summit before 10 new countries, many former members of the former Soviet bloc, join the European club in 2004.

The aim is to confirm a timetable that will bring Russia into the European Economic Area and elevate EU-Russian relations to a new status.

This will involve opening markets, removing trade barriers and harmonising legislation, and would put Russia's relations with the EU on the same level as Norway.

Co-operation in the fight against organised crime, and the rules governing sales of Russian gas and oil are also to be discussed.

Yukos issue

However, the significance of this meeting looks set to be overshadowed by the domestic crisis currently facing Mr Putin at home in Russia.

Khodorkovsky's arrest is seen by some as politically-motivated

The arrest of oil tycoon Mikhail Khodorkovsky, who was charged with fraud and tax evasion, has been heavily criticised by the international community.

It is seen by many as a politically motivated move to curb Mr Khodorkovsky's political ambitions and his funding of parties opposed to Mr Putin.

This issue may not officially be on the European summit agenda, but is will almost certainly be on the minds of everyone attending.

While Mr Putin prepares his European charm offensive, lawyers for the imprisoned former head of Yukos are also in Italy, pleading for the EU to raise the issue at the summit.

The US State Department as well as EU foreign policy chiefs have expressed their concerns over the Yukos issue, saying it raises serious questions about democracy in Russia that must be addressed.

'Two men at ease'

But this is unlikely to happen at the summit here in Rome.

Putin stayed at Berlusconi's Sardinia villa earlier this year

The Italian Government has already indicated that the prosecution of Mr Khodorkovsky remains an issue "absolutely internal to Russia", and few doubt that Mr Berlusconi will want to risk his close personal relationship with Mr Putin.

The last time the Russian and Italian leaders met was late August when Mr Putin and his family stayed at Mr Berlusconi's holiday villa in Sardegna.

Photographed in matching white shirts unbuttoned casually, always smiling and talking informally together, the picture was of two men at ease in each others company.

The summer heat may be over, but relations are as warm as ever.

Although dinner was not formally on Tuesday's agenda, Mr Berlusconi and the Russian president chose to dine together with their wives at Palazzo Chigi, the headquarters of the Italian presidency of the European Union.

Key partners

Russian relations are of crucial national importance to Italy both politically and economically.

Italy is Russia's second biggest trading partner after Germany, and the future place of Russia at the heart of Europe is one of Mr Berlusconi's grand visions.

It is no coincidence that in one of Mr Berlusconi's first speeches as EU president, he expressed his desire to see Russia eventually enfolded into the embrace of the EU.

The Italian prime minister has also enthusiastically backed Russia's efforts to join the World Trade Organisation.