A dispute over the terms of Russia's contract with Ukraine to transit oil to Europe will be solved within two days, a Kiev-based source close to the talks said on Monday.                                           

"All the contradictions will be eliminated within two days," the source told Reuters.

"European consumers will not be affected."                                           

Russia warned Europe of oil supply cuts because of a fresh row between Moscow and Kiev over new terms that Russia has called unacceptable. The office of Ukrainian president Viktor Yushchenko said the threat was politically motivated.