Confirming earlier reports, Russia has reached a deal with the United States paving the way for Moscow to join the World Trade Organization.

Presidents George Bush and Vladimir Putin are expected to sign a protocol on Russia's WTO entry when they meet in St Petersburg on Friday or Saturday, when the annual Group of Eight summit begins.

The breakthrough came after Washington dropped its demand that foreign banks be allowed to open branches in Russia.

Moscow has been campaigning for a decade to join the 149-nation trade body.