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Israel will be collaborating with Moscow in upgrading Russia's water systems, say sources on Israeli president Shimon Peres' delegation to Russia.

Peres reached an agreement with his counterpart, Russian President Dmitry Medvedev, during a meeting at the Black Sea resort of Sochi yesterday. Sources in Peres' delegation say Russia will invest about $500 million in the project.

Russia has about a third of the entire planet's sweet water resources. But it also has vast swathes of land over which the water is transported, and its pipeline systems are old, causing significant water loss en route. Also, only about 65% of Russia's population is actually connected to the water and sewage systems, and only 1% of Russia's resources meets international standards for potable water.

Moscow has already spent about $7 billion in upgrading its water infrastructure.

Peres suggested to Medvedev that Russia aim to become the world's breadbasket in view of predictions of spreading starvation. The president presented International Monetary Fund figures projecting that the number of hungry people will double by 2015. Peres suggested that to further the breadbasket aim, Israel would provide Russia with access to advanced technologies Israeli companies have developed in the fields of water and agriculture.

Sources near Peres said Medvedev smiled at the suggestion. At the culmination of their meeting, Medvedev announced intentions of setting up joint ventures with Israel in the area of agriculture.

Peres will be meeting in the coming days with Agriculture Minister Shalom Simhon. A Russian delegation headed by the country's minister for agriculture is scheduled to visit Israel next month. Russian delegates are also expected to attend the WaTech water technologies expo in Israel, slated for November.

Russian officials also discussed potentially investing about $100 million in joint research and development with Israeli companies. The investments would be made through Rusnanko, the Russian government company devoted to turning Russia into a nanotechnology superpower. Rusnanko has been seeking R&D alliances with Israel for about a year, and Peres arrived in Moscow with a draft agreement formulated by Israel's Ministry of Industry and Trade.