Merkel seeks progress with Russia
Russia's frosty ties with Nato are also expected to be discussed
German Chancellor Angela Merkel is to meet Russian President Dmitry Medvedev, as the two leaders seek to ease tensions over the conflict in Georgia.
Iran's nuclear programme and the global financial crisis will also be discussed at the talks in St Petersburg.
Germany is seen as one of Russia's closest allies in the West, but Mrs Merkel has been critical of Moscow's actions in Georgia in August.
However, she has urged the West to maintain a dialogue with the Kremlin.
The talks come a day after European Union observers began patrolling in Georgia to oversee a withdrawal of Russian forces from "buffer zones" around Georgia's breakaway regions of South Ossetia and Abkhazia.
Russia has kept troops there since ousting Georgian forces in August. It has promised to complete its troop pull-out by 10 October, but it plans to keep thousands of troops in the breakaway regions.
In St Petersburg, Mrs Merkel and Mr Medvedev are also expected to discuss how to boost growing bilateral trade.
The Russians want German technology, while the Germans seek access to Russian markets, the BBC's Steve Rosenberg in Berlin says.
Some 40% of the natural gas Germany imports comes from Russia, and the two countries are now building a pipeline under the Baltic Sea to bring Siberian gas to Europe.
Many German business leaders believe their future depends on good relations with Russia, our correspondent says.
He says Berlin does not want its good links with Moscow to be broken now by a new stand-off.