MOSCOW – Russia and Ukraine stepped back Friday from the brink of repeating their annual winter “gas war” amid surprisingly warm smiles and handshakes between prime ministers Vladimir Putin and Yulia Tymoshenko.

The Russia-Ukraine agreement, sealed after a night of talks in the Crimean resort city of Yalta, makes several unexpected concessions to Ukraine. Moscow agreed to an estimated 60 percent increase in transit fees paid by Russia’s state gas monopoly Gazprom and to lifting stiff penalties that it could have imposed on Ukraine for not fulfilling its 2009 purchasing pledges. The bargain will also peg Ukrainian purchases of Russian gas to market rates for the first time.

“It would be very good to meet the New Year without shocks,” Mr. Putin told journalists in Yalta Friday.

Ukraine and Russia have engaged in regular spats over gas supplies for the past four winters, since Russia sends gas westward through Ukraine, with a shivering western Europe watching anxiously downstream.