MOSCOW, November 2 (RIA Novosti) - Egypt intends to set up a free economic zone for Russian companies, the country's president said Thursday after a meeting in Moscow with his Russian counterpart.

Hosni Mubarak told Vladimir Putin he had met with Russian business leaders, and discussed ways of developing economic ties.

"We intend to give them a free economic zone, allowing them to work under a preferential system, and would be able to develop a broad range of production, including pharmaceuticals, work in the oil and gas sphere, and other sectors," Mubarak said.

Mubarak also told Putin that relations between their two countries had reached a high point. During his visit to the Russian capital, the first since May 2004, he is also expected to meet the prime minister, and Egypt's foreign minister is set to meet his Russian counterpart.

The authoritarian Egyptian leader, who has ruled his country for 25 years, has long-standing links with Russia and the Soviet Union. A former pilot who served in a bomber squadron, he received part of his training in Kyrgyzstan, and studied at a military academy in Moscow in the 1960s.