Moscow/Yerevan - President Dmitry Medvedev began a two-day visit on Monday to Armenia, caught in a precarious security deadlock in the Caucasus following Russia's recent war with Georgia.

The trips marks Medvedev's fifth meeting this year with Armenian President Serzh Sarkisian, a firm Moscow ally.

"The main provision on the agenda of Medvedev's visit will be talks in the tete-a-tete and extended formats talks with Sarkisian,"

a Kremlin official said on customary condition of anonymity Monday. "This vividly proves the high level of political dialog aimed at the further strengthening of strategic partnership."

The official added that trade and economic relations were the primary topics of discussion.

Formerly known as the Soviet Union's manufacturing hub, Armenia has remained firmly under Moscow's radius with Russian business holding near total control over Armenia's energy and transportation sectors.

But an unannounced visit by Russia's Defence Minister Anatoly Serdyukov to the Armenian capital of Yerevan earlier this month sparked rumours in the Russian press that Moscow is pushing for a wider bilateral military partnership.

Russian daily Nezavesimaya Gazeta quoted the head of Armenia's parliamentary defence committee as saying Russia could could deploy new military bases in Armenia and even peacekeepers in Nagarno-Karabakh, an area Armenia fought a war over with Azerbaijan in the early 1990s.

But analysts on Monday downplayed such a scenario, saying Russia's current presence at the Gyumir base, near Armenia's border with Turkey, is already so strong further deployments were senseless.

They said Armenia was not keen for a Russian military presence in the frozen conflict zone of Nagarno-Karabakh, fearing to exacerbate with neighboring Georgia.

"Armenia is treading a very thin line, they don't want to upset Georgia or burgeoning relations with NATO, at the same time they see Russia as their last line of defence in the case of an attack," Moscow-based independent military analyst Pavel Felgenhauer said.

"Armenia has reason to worry that Georgia not join the blockade against it," Felgenhauer told Deutsche Presse-Agentur dpa on Monday.

Over 90 per cent of Armenia's trade goes through Georgia as it faces political tensions along its two other borders - unresolved territorial disputes with Azerbaijan and a failure to achieve reconciliation with Turkey over the 1915 Armenian genocide by the Ottoman Empire.

NATO envoy to the Caucasus, Robert Simmons was also holding talks with the Armenian leadership on Monday on developing the country's ties with the western military organization. Armenia has participated in several NATO exercises in recent months. dpa