Putin doesn't mention Kosovo to Bush

However, the Russian leader said the talks at his residence in Sochi were generally positive, and that he was "cautiously optimistic" that the dispute, which has proved a major stumbling block in relations between Moscow and Washington, will be resolved.

The meeting between the Russian and U.S. presidents, who will leave office next month and next January respectively, produced a "strategic framework" on future relations between the countries, encompassing areas ranging from trade to counter-terrorism to defense.

Summing up their seven-year relationship as presidents, the U.S. leader said: We worked very hard over the past years to find areas where we can work together, and I think we've done a pretty good job of it... It's been a remarkable relationship."

Putin told the joint news conference: "I won't hide the fact that one of the most difficult issues was and remains American missile defense in Europe... I want to be understood correctly: there has been no change in our fundamental attitude to the American plans."

However, he said: "there was some positive progress. Our concerns were heard by the American side, first at the March '2+2' meeting [between top diplomats and defense chiefs], and then today, in the conversation with President Bush."

He said he believes Bush is seriously and sincerely seeking to resolve the problem. "We fully support this attitude," Putin said.

Russia views a planned U.S. missile base in Poland and a radar in the Czech Republic as a direct threat to its security and has rejected Washington's assurances that they were designed as protection against Iran and other Middle East states.

Bush told the news conference: "The Russian side has made clear that it does not agree with the decision to establish sites in Poland and the Czech Republic and reiterated its proposed alternative."

Putin proposed in June last year that the U.S. use the Gabala radar station, which Russia leases from Azerbaijan.

The U.S. leader stressed that the missile shield will be purely defensive.

"I view this as defensive, not offense. And obviously we've got a lot of work to do to convince the experts that the system is not aimed at Russia... the vision about having a global system is something I strongly support."

Bush also met in Sochi with Russian president-elect Dmitry Medvedev, who is set to take over in the Kremlin on May 7 when Putin steps down.

The U.S. leader called Medvedev a "straightforward fellow", and said he looked forward to working with him when he assumes office. Their next meeting is likely to be at the G8 summit in Japan on July 7-9, Bush said.

When Putin's chosen successor Medvedev becomes president, the outgoing leader is likely to become prime minister. Under Russia's current setup the president has far greater powers than the premier, but Putin is widely expected to assume a commanding role in his new job.

Asked by a journalist whether he intended to maintain his control over Russian foreign policy as prime minister, Putin said: "Under the constitution, foreign policy is set by the president, and this will be done by Russian president-elect Dmitry Medvedev. He will represent Russia at all important international forums."

The meeting produced a joint "strategic framework" agreement on bilateral relations, encompassing trade, counter-terrorism, nuclear non-proliferation, Russia's WTO membership bid, energy cooperation, and also ways to continue seeking a solution to the missile defense dispute.

The document said the countries would continue to work on a new Strategic Arms Reduction Treaty, and that both Moscow and Washington remain committed to reducing their strategic arms to a minimum.

The Strategic Arms Reduction Treaty (START-1) was signed by the United States and the Soviet Union on July 31, 1991, five months before the U.S.S.R. collapsed, and remains in force between the U.S., Russia, and three other ex-Soviet states. The treaty is set to expire on December 5, 2009.

Putin said key differences remained on the issue, but that the sides would work to find a compromise.

"As for strategic offensive armaments, some disagreements remain in our fundamental approaches," he said.

Last year, "Mr. Bush and I agreed to start work on a new agreement that would replace the START Treaty, which will expire in 2009. We agreed that it would be necessary to maintain all the useful and necessary parts of the START Treaty. We're going to continue working on this," Putin said.

In their strategic framework agreement, the presidents agreed that their countries would continue to strengthen Russian-U.S. economic and business interaction, including the establishment of new inter-governmental and business dialogue in the next few months.

Bush said he supported Russia in its bid to join the World Trade Organization, and would seek the cancellation of the Jackson-Vanik amendment in Congress.

The Jackson-Vanik amendment was passed in 1974 and restricted trade with the Soviet Union over human rights violations. The amendment, which still applies to Russia, puts restrictions on Russian-American trade relations and has proved a major stumbling block to Russia's bid to join the World Trade Organization.

"We hope that the United States this year will make Russia exempt from the Jackson-Vanik Amendment, and we hope that the United States will establish permanent normal trade relations with Russia," Bush said.

Bush had arrived in Russia after a stop-off in Croatia, one of the new recruits to NATO, after a summit of the Western military alliance that concluded in Bucharest on Friday.

Along with the missile shield, NATO's ongoing expansion has proved a major irritant in Russia-U.S. relations. In Romania, Bush pushed for ex-Soviet states Georgia and Ukraine to be admitted to NATO's Membership Action Plan, a precursor for membership, but was voted down over European fears that the move would unnecessarily provoke Russia.

Putin told the news conference: "I reaffirmed Russia's position on this count. I believe that in order to improve relations with Russia it is necessary not to pull the former Soviet republics into political or military blocs, but to develop relations with Russia itself."

The issue of Kosovo was not discussed at all, an anonymous Russian official was quoted. "There are more important issues than Kosovo".

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