Navalny was flown to Germany last year after being poisoned
German Chancellor Angela Merkel on Friday used her final official visit to Russia to tell President Vladimir Putin to free Kremlin critic Alexei Navalny, but the Kremlin leader rebuffed her, saying the jailing was unrelated to politics.
The talks, as Merkel prepares to step down following elections next month, coincided with the first anniversary of Navalny's poisoning, an incident that strained Russia-Germany ties.
Navalny was flown to Germany last year after being poisoned with what the West concluded was a military nerve agent. Moscow rejects that and alleges a Western smear campaign. Navalny was jailed when he flew back to Russia.
"We ... spoke about the depressing situation of Alexei Navalny," the German leader told reporters after the talks.
"I have demanded once again from the president to release Navalny and I have made it clear that we will remain on the case," she said.
Putin rebuffed Merkel's remarks, while not identifying Navalny by name and referring to him only as the "subject".
"As for the subject in question, he was not convicted for his political activities, but for an offence against foreign partners," Putin said, a reference to the embezzlement case.
"As far as political activities are concerned, no-one should hide behind political activities to carry out business projects, while breaking the law," he said.
Appeal to the west
In a letter to mark the anniversary that was published in three European newspapers on Friday, Navalny appealed to the West to do more to combat corruption in countries like Russia.
In Britain, the government published details of sanctions against seven individuals it said were Russian intelligence operatives suspected of involvement in his poisoning. There was no immediate reaction from Moscow.
Relations between Merkel and Putin, two of Europe's longest serving leaders, soured in 2014 when Russia annexed Crimea from Ukraine, drawing broad condemnation and sanctions from the West.
At a news conference following talks that lasted almost three hours, the leaders said they had discussed Afghanistan, Libya and the Nord Stream 2 pipeline from Russia to Germany.
Putin told reporters that there were just 15 kilometres (9.3 miles) left to complete the undersea gas pipeline that the US has opposed. Washington says it will deal a huge blow to ally Ukraine by bypassing the historic transit country.
Merkel said she urged Putin to extend Moscow's gas transit deal with Ukraine that expires in 2024.
Putin told reporters that Russia planned to fully comply with its obligations on gas transit via Ukraine and that Moscow was ready to extend the transit agreement beyond 2024 but that it needed more details.
But Putin said he had the impression that the leadership in Ukraine had decided against a peaceful resolution to the conflict in eastern Ukraine and that Kyiv looked poised to adopt legislation that he said would amount to it unilaterally exiting a peace deal.
On Afghanistan, Putin said it was not in Russia's interests to dwell on the results of the US military campaign there and that it was important to establish good and neighbourly relations with Afghanistan.
Merkel is due to step down as chancellor after a September 26 election that will end 16 years in office, while Putin, who has been in power for more than two decades, is next up for election in 2024, though he has not said whether he will run.
Merkel, 67, grew up in former Moscow-backed East Germany and speaks Russian, while Putin, 68, was based in Dresden during the Cold War as a KGB officer and speaks German.