Russian President Dmitry Medvedev said Thursday the era of US financial dominance was over, and he won the backing of Germany`s visiting chancellor in calling for a "more just" system, AFP reported.

Both Medvedev and German leader Angela Merkel called for new measures to respond to a credit crunch that has raised fears of a deep worldwide recession since it spread from the United States into international markets.

"The time of domination by one economy and one currency has been consigned to the past once and for all," Medvedev said during a forum alongside Chancellor Merkel.

"We must work together towards building a new and more just financial-economic system in the world based on the principles of multipolarity, supremacy of the law and taking account of mutual interests."

On Wednesday, the US Senate resoundingly passed a 700-billion-dollar Wall Street bailout, widely seen as the best chance of stemming the turmoil. The House of Representatives has yet to approve the move.

Medvedev said the crisis showed the United States was not powerful enough to control world markets alone.

"The events of recent times confirmed that a single country, even powerful, is unable to be a kind of mega-regulator," he stressed.

His comments came a day after Russia`s powerful Prime Minister Vladimir Putin lashed out at US economic "irresponsibility" for the global financial crisis.

Russia`s fledgling stock markets, rarely predictable in normal times, have swung wildly in recent weeks as the scope of the US-rooted crisis has become clear, forcing regulators to repeatedly suspend trading.

Speaking through a translator, Merkel said: "We need new mechanisms of international (financial) architecture. I have long been convinced of this, not just during the latest financial crisis."

Germany is widely considered Russia`s closest ally in Western Europe, but Merkel has sharply reproached Russia over its brief August war with the former Soviet republic of Georgia.

She reiterated her criticism Thursday of Moscow over its military intervention in Georgia, while questioning the scope of a European Union peace monitoring mission launched in the Caucasus state.

"Russia`s reaction in this conflict had not been appropriate," said the German leader.

"We still need to talk about the role of OSCE (Organization for Security and Cooperation in Europe) observers, see how it will develop," she said, alluding to the deployment of monitors in two Russian-backed rebel regions of Georgia.

Russia refuses to yield to this demand, saying the decision belongs to the two breakaway republics, whose independence it recognised in August.

But at a joint press conference held later alongside the Russian president, Merkel said: "We believe Georgia`s territorial integrity is not open for discussion."

She also addressed the contentious issue of NATO membership for Georgia and Ukraine, which Russia opposes, saying it was too soon to provide the ex-Soviet republics with a so-called Membership Action Plan, which sets in motion the procedure for joining the alliance.

A NATO ministerial meeting in December that many predicted would be the occasion for the alliance to extend MAP to Georgia and Ukraine would instead be only "an initial evaluation on the road to MAP," Merkel told journalists.

"The position in favour of membership as soon as possible is not the German position," Merkel said.

The German chancellor has stood out in the European Union by pressing for the lines of communication with Moscow to remain open.

Since the August war, tensions over Georgia have spilled over into other areas of German-Russian cooperation.

An EU summit due this month to debate the resumption of negotiations with Russia on a new partnership and cooperation pact was also on the agenda at Thursday`s summit.

Russia last week pulled out of a meeting at the UN General Assembly of foreign ministers from Germany and four other world powers who were working to resolve a crisis over Iran`s disputed nuclear programme.

Merkel, whose country is Russia`s biggest trading partner, also discussed trade and Iran`s controversial nuclear programme with Medvedev during the talks between Germany and Russia.

The talks, held each year alternately in Russia and Germany, have been limited this year to one day and included fewer ministers than usual, indicating the strained bilateral relations.