Baikonur currently launches all missions to the International Space Station

The site is Russia's only facility for launching manned space flights.

President Vladimir Putin and his Kazakh counterpart, Nursultan Nazarbayev, signed the deal at a meeting in Kazakhstan's capital, Astana.

Launch activity at Baikonur has decreased in recent years, with Moscow moving most of its military space work to Plesetsk in north-west Russia.

But about 80,000 people are still employed at Baikonur, which is now used mainly for commercial and scientific launches.

It has launched all supplies and missions to the International Space Station since the United States grounded its shuttle fleet in February last year after the Columbia shuttle broke up in mid-air.

The agreement made no mention of any changes to the annual rent of $115m.

Reports say Kazakhstan has been trying to raise the fee or get a share of profits from commercial launches from the site.

Oil deal

The two countries signed another agreement on Russian assistance in the launch of Kazakhstan's own communications satellite.

Russia and Kazakhstan also made progress on the demarcation of their 7,000-kilometre border, stretching through the deserted steppes of Central Asia.

And the Russian oil company LUKoil used the visit as an opportunity to sign a deal on drilling in two Kazakh sections of the Caspian.

The company said the joint venture could lead to LUKoil investments of some $3bn if oil is discovered at the sites.

Kazakhstan is among the more prosperous of Central Asia's former Soviet republics and correspondents say it is eager to co-operate with Russia, which owns the main oil pipeline routes linking the landlocked region with world markets.