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SUE BAILEY

MOSCOW (CP) - Prime Minister Paul Martin is expected to sign with Vladimir Putin a joint statement condemning terror even as the Russian president's related tactics are under international attack.Martin arrived in Moscow on Monday as part of a six-day European tour that will also take him to France and Hungary. He meets Tuesday with Putin, who has been assailed for using terrorist threats as an excuse to crack down on free speech while beefing up security forces.

There are also reports of arbitrary arrest. Some critics worry that Putin is leading Russia back down an authoritarian path.

Martin isn't willing to go that far. But he says global leaders should recognize Putin's dilemma while also keeping close watch.

"The international community must raise these issues and make it clear that we'll follow them," Martin said after discussing the delicate matter with Prime Minister Mikhail Fradkov at the Russian White House.

"I think it's important that the rest of us be very supportive of the Russians in terms of the difficulties they're dealing with," Martin said. "But at the same time we (must) be very clear as to our perspective on freedom of action, freedom of expression."

Fighting terrorism is a balancing act that must favour individual rights, he said. The Liberal government struggled with related issues when it passed anti-terrorism legislation after the Sept. 11, 2001, attacks in the United States, Martin added. Civil libertarians lambasted some of the new measures, saying they gave police wide-ranging powers.

Putin, a former KGB operative, was targeted two weeks ago in an extraordinary letter signed by 100 former heads of state, politicians, writers and intellects. It urges western leaders to challenge the Russian leader for cracking down on free media, bolstering security forces and other changes that seem to solidify his central grip on power.

"Dictators hate having their legitimacy challenged," said former CIA chief James Woolsey, one of those who signed the letter. Putin doesn't quite deserve that label, but he has sent alarming signals of authoritarian intent, Woolsey said in an interview.

Putin has used Russia's battle with separatist rebels in Chechnya and the horrific school hostage drama in Beslan last month as "anti-terrorist" excuses to undermine democracy, the letter says. Those who signed it include former Czech president Vaclav Havel, U.S. senators John McCain (R-Ariz.) and Joseph Biden (D-Del.) and former Swedish prime minister Carl Bildt.

"All too often in the past," it says, "the West has remained silent and restrained its criticism in the belief that President Putin's steps in the wrong direction were temporary and the hope that Russia soon would return to a democratic, pro-western path.

"We must speak the truth about Russia," it says. "We owe it to the victims of Beslan and the tens of thousands of Russian democrats who are still fighting to preserve democracy and human freedom in their country."

Martin says he'll take that message to Putin.

"There's no doubt that Russia is dealing with a very difficult situation," he said. "But at the same time, human rights violations are not the way that you're going to deal with terrorism."

Martin, on his first official visit to the stomping grounds of the Romanovs and Peter the Great, will also raise Canadian business concerns.

Investors were shocked in August when a Halifax-based company that partly owns the Aerostar luxury hotel in Moscow was suddenly evicted by its co-owner - a company with suspected ties to Russian mobsters.

The dispute, a closely watched test case for the wisdom of doing business in Russia, is still tied up in court.

"There's a tremendous opportunity for Russia and for Canada in a wide range of areas where Canadians have expertise to invest in Russia," Martin said. But people will be scared off unless "the rule of law is in fact the rule - and not the exception," he added.

Martin also stressed the importance of asserting Canadian sovereignty in the Arctic. Canada and Russia, both major Arctic states, have co-operated for 35 years on such issues as environmental monitoring and Aboriginal issues.

Others may try to move in on the Arctic as lucrative oil, gas and other resources become more attractive, Martin said.

Canada has a responsibility, especially to its aboriginal populations, to protect that land, he said.

Martin and his wife, Sheila, will visit France and Hungary before heading home Saturday.