Vladimir Putin with Sergei Ivanov: Face-off

Moscow, Nov. 14 (Reuters): Russian President Vladimir Putin promoted his two closest allies ? his chief-of-staff and his defence minister ? in a government reshuffle today that made both of them strong contenders to succeed him in 2008.

In televised comments, Putin said chief Kremlin aide Dmitry Medvedev, also chairman of gas giant Gazprom, had become first deputy Prime Minister in the government of Mikhail Fradkov.

Defence minister Sergei Ivanov, a close political confidant, will take on the extra job of deputy Prime Minister, a rank already held by key liberal economic strategist Alexander Zhukov.

Politicians and analysts said Putin’s surprise move meant it was now a straight choice between Medvedev and Ivanov as the hand-picked successor to the presidency when he bows out in 2008.

“This decision effectively means the start to the presidential campaign of 2008,” said Dmitry Rogozin, who heads the nationalist Rodina (Motherland) party.

Both Medvedev, who has been in his present job for two years, and Ivanov, Putin’s friend from his days in the KGB state security apparatus, have long been at the top of the list of potential candidates to replace him.

Ivanov, 52, and Putin have known each other since the 1970s, both hailing from St. Petersburg.