Moscow ? The prime ministers of Russia and Ukraine announced a deal early today to settle the gas dispute that has drastically reduced supplies of Russian gas to Europe for nearly two weeks.

Russian Prime Minister Vladimir Putin said Ukraine will pay 20 percent less than the European price for the gas this year. This means a substantial increase for Ukraine in the first quarter, but the price could fall significantly later in the year as gas prices are expected to drop.

Ukraine Prime Minister Yulia Tymoshenko said natural gas supplies would resume once the two countries’ gas companies sign a contract. It was not clear how soon this would happen. Russia’s Gazprom and Ukraine’s Naftogaz, both state controlled, were told to prepare the documents.