MOSCOW, July 1 (RIA Novosti) - President Dmitry Medvedev said on Wednesday that Russia wants to develop strong ties with Belarus.

Relations between the countries, which have been working for several years to create a Union State, have been strained recently over trade disputes.

"We are determined to pursue a consistent course towards further strengthening the economic base of Russian-Belarusian relations, stepping up cooperation in the social and humanitarian spheres, in defense, security and international affairs," the president said in a statement released by the Kremlin.

"We are confident that such an approach is in the interests of social and democratic progress, and will provide for the future increase of the wealth of the Russian and Belarusian peoples, while giving more strength to their mental, cultural and historic similarities," he said.

Last month, Russia briefly banned supplies of Belarusian dairy products, one of the country's key exports, citing failure to comply with new regulations. The ban triggered an angry reaction from Minsk, worsening ties that had already been strained over a Russian natural gas supply dispute.

Dairy supplies have largely resumed, but a new dispute may loom over Russian gas monopoly Gazprom's demand that Belarus pay $231 billion in overdue debt for natural gas supplies, resulting from a price rise. Minsk denies the debt.

Moscow also suspended the final $500 million portion of its $2 billion stabilization loan to Belarus, after the ex-Soviet state refused to accept it in Russian rubles, insisting on U.S. dollars.