Russian President Vladimir Putin held talks Wednesday with Libyan leader Moammar Gadhafi in a move to rebuild ties with a former ally that is now an increasingly open market for investments. The head of Russia's state-controlled gas monopoly Gazprom said the company is interested in projects in Libya, including the construction of an undersea gas pipeline from Libya to Sicily, the Russian news agency Interfax said. During the 1980s, Libya was a major customer for Soviet weapons, buying a large number of fighter jets, helicopters, tanks and other equipment. Moscow's support was essential for Libya, which faced international sanctions. Russian Finance Minister Alexei Kudrin said Wednesday the two countries had reached an agreement for Tripoli to repay Moscow some $4.6 billion in outstanding Soviet-era debt - one of the main disputes between them. Putin's bid to rebuild relations comes as Libya has dramatically improved ties with the West after Gadhafi announced in 2003 that he was dismantling his nuclear weapons program. The same year, Libya accepted responsibility for the 1998 Pan Am bombing over Lockerbie, Scotland, that killed 270 people, and agreed to pay compensation to families.