By Elizabeth Pineau and Denis Pinchuk
MOSCOW (Reuters) - France and Russia will exchange intelligence on Islamic State and other rebel groups to improve the effectiveness of their aerial bombing campaigns in Syria, French President Francois Hollande said on Thursday after talks with Vladimir Putin.
However, the two men remained at odds over the fate of Syrian President Bashar al-Assad, an ally of Russia whom Western and Sunni Arab countries blame for Syria's nearly five-year civil war and want removed from power.
Speaking after a working dinner in the Kremlin with Putin, Hollande said they had agreed to target only Islamic State and similar jihadi groups in Syria. The West has accused Moscow of targeting mostly Western-backed rebel groups fighting Assad.
"What we agreed, and this is important, is to strike only terrorists and Daesh (Islamic State) and to not strike forces that are fighting terrorism. We will exchange information about whom to hit and whom not to hit," Hollande told a joint news conference with Putin.
France will also increase its support to rebel groups battling Islamic State on the ground in Syria, Hollande added.
Hollande is on a diplomatic offensive to build a common front against the militant Islamist group that has claimed responsibility for the attacks in Paris on Nov. 13 that killed 130 people.
Islamic State has also said it downed a Russian plane on Oct. 31 over the Sinai Peninsula in Egypt, killing all 224 people on board.
Putin said Moscow was ready to unite with Paris against a "mutual enemy", but he reaffirmed Moscow's long-standing view that Assad and the Syrian government were also allies in the fight against terrorism.
"I believe that the fate of the president of Syria must stay in the hands of the Syrian people," Putin said, in stark contrast to Hollande, who insisted Assad could play no future political role in the country.
TARGET OIL SUPPLIES
French officials say Putin and Hollande have a good working relationship, but in an initial televised exchange before dinner the two men had appeared uncomfortable and avoided eye contact.
Both Russia and France have stepped up their aerial bombing campaigns in Syria since the attacks in Paris.
On Thursday both Putin and Hollande stressed the need to step up air strikes against vehicles transporting oil across territory controlled by Islamic State and thereby deliver a blow to a key source of financing for the militant group.
Putin used the opportunity of the joint news conference with Hollande to repeat his accusations against Turkey of turning a blind eye to oil smuggling by Islamic State. He said it was "theoretically possible" that Ankara was unaware of oil supplies entering its territory from Islamic State-controlled areas of Syria but added that this was hard to imagine.
Relations between Russia and NATO member Turkey have deteriorated sharply since Turkish forces downed a Russian warplane on Tuesday and Moscow has warned of "serious consequences" for economic ties.
Hollande said the downing of the Russian jet highlighted the need for countries to coordinate their military activities more closely to avoid a possible repetition of what he called a "regrettable incident". He again called for a "de-escalation" of the tensions between Moscow and Ankara.
Putin also said Russia would keep cooperating with the United States and its partners to fight Islamic State in Syria, but that cooperation will be in jeopardy if there are any repeats of the shooting down of the jet.
"We are ready to cooperate with the coalition which is led by the United States. But of course incidents like the destruction of our aircraft and the deaths of our servicemen... are absolutely unacceptable," Putin said.
(Additional reporting by John Irish in Paris and Vladimir Soldatkin in Moscow; Writing by Gareth Jones; Editing by Andrew Heavens)