Putin, the first Kremlin leader to visit Israel, a former Cold War foe, sought to allay fears about Moscow's decision to sell anti-aircraft missiles to Syria and its nuclear cooperation with Iran.
"The system we are going to supply to Syria is short range and poses no threat whatsoever to Israeli territory," he told journalists after signing the joint statement.
Noting that 25 per cent of Israel's population was of Russian origin, he said: "we want those people to live in security. We are not planning to do anything that would upset the balance of forces in the region."
But Katsav, however, said there were "disagreements between the Russian president and myself, despite the steps that the president has taken to minimise the dangers."
"In recent days Syria has given Hezbolah additional rockets," the Israeli President said.
Stressing that nuclear cooperation between Russia and Iran was limited only to civilian activities, Putin said he opposed any effort by Tehran to build an atomic bomb.
"We are working with Iran in order to develop the atom for peaceful ends and we are against any programme seeking to endow Iran with an atomic weapon," he said.
The joint statement by the two leaders "unreservedly condemns all acts, methods and practices of terrorism as crimes that have no excuse whatsoever, regadless of where and by whom they are committed."
They "shall increase the effectiveness of cooperation in order to strengthen all interactions between the two states, while showing mutual respect and confidence."
They also pledged to work for a "comprehensive peace in the Middle East including normalisation of relations between Israel and the Arab states."
In his remarks, Putin, on the second day of his historic visit, said the Jewish state and Palestine could reach peace on the basis of the "road map'' plan proposed by the quartet of mediators, which includes Russia, the US and the UN.
"We think there is a chance now to achieve a just Israel-Palestinian settlement," he said, though much would depend on the willingness of the two sides to compromise.
He also hoped to sign several agreements with Israel in coming months, including on scientic research, hi-tech and military cooperaton.
Putin also held talks with Prime Minister Ariel Sharon, who was quoted by the army radio as saying that "we will never forget how the Soviet Union freed the Nazi concentration camps."