But the move came as Russian President Dmitry Medvedev announced his country will place short-range missile systems on the EU's eastern border to counter planned US missile defence installations in Eastern Europe, threatening further tensions.

The wide-ranging review of Europe's relations with Moscow was ordered by the 27 member states after negotiations were suspended in September following the short Russia-Georgia war the previous month.

The negotiations for a new EU-Russia agreement, to cover everything from energy supplies to human rights, "should continue, first because this would allow the EU to pursue its own interests in Russia, and secondly because this is the best way to engage with Russia on the basis of a unified position," the EU Commission said in its report.

"When the EU speaks with one voice, and acts as one, Russia takes notice," it added.

"The next negotiating sessions should be scheduled now," the EU's executive arm stressed, adding that the next meeting of EU foreign ministers, next Monday, would be "an opportunity for member states to reach a common understanding on the basis for the negotiations to proceed."

That meeting will happen days ahead of an EU-Russia summit in Nice, southern France, on November 14.

EU External Relations Commissioner Benita Ferrero-Waldner said the talks "are not a gift to Russia".

"We have a deep and complex relationship where our mutual interests are deeply entwined,", she told the EU parliament's foreign affairs committee.

"This does not mean business as usual because we cannot accept the status quo in Georgia," she added, while stressing, "I think it's now time to really start negotiating."

The EU review of relations with Moscow was released two days after the leaders of EU members Lithuania and Poland insisted that there should be no more talks until Russia fully respects the ceasefire with Georgia.

In a joint statement, Lithuanian President Valdas Adamkus and his Polish opposite number Lech Kaczynski, said they were "deeply concerned with the lack of will on the Russian side."

Adamkus and Kaczynski highlighted a failure to respect ceasefire clauses covering the withdrawal of Russian troops to pre-conflict positions and on free access to humanitarian aid.

Both Lithuania and Poland are staunch allies of Georgia's pro-Western leadership.

Elsewhere in its Russian review, the European Commission said that Russia's military campaign in Georgia and subsequent recognition of the breakaway region of South Ossetia and Abkhazia had "cast a serious shadow over the EU-Russia relationship".

The EU has sent monitors into Georgia but they have been unable to enter the two disputed regions.

"Russia needs the EU," it said, highlighting its energy and raw material exports to Europe.

Russia is the EU's third largest trading partner, with growth rates of up to 20 percent per year, while the EU is also the biggest investor in Russia.

The EU report also underlined human rights concerns, warning that "there is a growing gap" between Moscow's commitments and the situation on the ground.

At present EU-Russian relations are governed by a 1997 Partnership and Cooperation Agreement reached when a much weaker Russia was emerging from the split-up of the old Soviet Union.

Its recent more assertive attitude has worried its former minions including Lithuania and Poland.

Ferrero-Waldner also criticised Russia's missile plan on Wednesday.

"If you are going to put missiles in Kaliningrad that is not going to increase security in Europe," she told the EU lawmakers.

"I wonder how such steps are compatible with the new European security strategy that Russia wants," she added.