President Medvedev has ordered Russia's state-owned gas producer to cut supplies to Belarus after Minsk failed to pay its debt.
On Monday, the two sides met in Moscow in an attempt to reach an agreement. Belarus recognized its $200 million debt, but refused to repay the sum in cash, instead offering payment in machinery, equipment and other commodities.
The Russian president said such an offer was unacceptable and that a conventional payment must be made.
Belarus will see gas cuts proportional to the size of its debt. The cut limit will reach 85 per cent of the supply volume.
Moscow says the restrictions will not affect its European consumers, as more fuel will be pumped through Ukrainian territory.