A compromise was drafted that claimed that the current Estonian republic was the same republic that was declared in the Treaty of Tartu in 1920. The 'occupation and annexation' claims were dropped because the Estonian parliament knew that the Russian parliament would object to these claims and thought it fruitless to pursue recognition of this historical wrong when they could just as easily get their border treaty signed.
The preamble reads:
Proceeding from the legal continuity of the Republic of Estonia proclaimed on 24 February 1918, as it is stipulated in the Constitution of the Republic of Estonia, from the Resolution of the Republic of Estonia Supreme Council of 20 August 1991 "On the National Independence of Estonia," and from the Declaration of the Riigikogu of 7 October 1992 "On the Restoration of Constitutional Power," and keeping in mind that the Treaty mentioned in Article 1 of this act shall, in accordance to the Constitution of the Republic of Estonia, partially amend the state border line established by Article III Section I of the Tartu Peace Treaty of 2 February 1920, shall not influence the rest of the Treaty and shall not determine the treatment of bilateral issues not connected with border issues.."
Pretty clear if you ask me. But Russia, who asked that Estonia sign the treaty first, now has more problems. They are unhappy with the treaty because it mentions 1918, and if one does some thinking then, it de facto acknowledges the occupation and annexation.
"I don't think the border treaty, in the form in which the Estonian parliament ratified it today, would be acceptable to Russia," said Mihail Margelov, who chairs the foreign affairs committee in the Duma's upper house.
What is going on here you might ask? Why would Russia not want to ratify, really? It's not that hard to sign. You have a meeting, raise your hands. You vote. It's ratified. The other way - bringing in advisors, creating more diplomatic intrigue, more empty threats about "goose eggs" and "donkey ears" - that's more difficult to do. So why go through that, when you can ratify the treaty and go back to your Dacha for the summer a happy parliamentarian?
As I see it, it can only be about two things - money or pride. I think it's both. This is a very acceptable document to ratify, but Russia is worried about two things - admitting ins ome fashion that it occupied and annexed Estonia in 1940, and being liable to compensate all of the people who lost their property, livelihoods, and lives when the occupation commenced.
However, this diplomatic game has backfired for the Russian Federation.
The egg could have been on Estonia's face. They could have made Estonia look weak, and unfit for the ranks of the EU. If the nationalists in Isamaalit and Res Publika had decided that they should push the occupation issue further, then Estonia would have looked bad and unreasonable (ie. like Latvia.) However, since their treaty doesn't really push the issue, it is the Russians who are caught looking ridiculous with egg on their face. They seem irrational (which they are).
If the Russian parliament is unhappy that's their problem. They are the ones who requested that Estonia sign the border treaty first.