Russian President Vladimir Putin ordered gas giant Gazprom on Saturday to supply gas to Ukraine at the current price for the first quarter of 2006 if Ukraine accepts a price hike starting the second quarter.

Putin's new offer comes as Russia is counting down on its threat to shut down gas supply to Ukraine if no deal is clinched by New Year's Day.

"We must think about all aspects of relations between Russia and Ukraine," Putin was quoted by the Interfax news agency as saying at a Security Council meeting.

"For this reason, I instruct the government and Gazprom to ensure supply of gas to Ukraine for the first quarter of 2006 on the terms for 2005 on condition that our Ukrainian partners sign before the end of today a contract that would contain Gazprom's proposal to switch to market prices in the second quarter," Putin said.

Putin said Russia would consider the proposal rejected if Ukraine gives no clear reply.

Ukraine is buying Russian gas for 50 U.S. dollars per 1,000 cubic meters, but Gazprom has asked Ukraine to pay more than quadruple this price and offered cash payments for the transit of its gas to European clients.

Ukraine said it is willing to switch to market prices for gas but insisted on a transitional period to adjust its economy.

The gas row has also sparked European concerns of a disruption of gas flow as most of its gas supply from Russia is transited through a Ukrainian pipeline.