NOVO OGAREVO, Russia – Prime Minister Vladimir Putin said Russia was pinning its hopes on US President Barack Obama to revive ties with the United States as the two leaders met for the first time.
The pair sought at their breakfast meeting at Putin's country residence to emphasise a cordial atmosphere after the US president caused controversy last week by saying Putin as had "one foot" in the past.
Obama praised Putin -- seen by most as Russia's de facto leader -- for his "extraordinary work" as president between 2000-2008 and now in his new post as prime minister.
Putin told the US president in turn: "We associate your name with the hopes of developing our relations."
"The history of Russian-US relations... has different shades. There were years of a true flourishing but there were also some quite grey days and even (days of) confrontation."
Obama said their talks were an "excellent opportunity to put US-Russian relations on a much stronger basis."
"We may not agree on everything, but we have consultations that will serve the Russian and the American people," he added.
The two countries are still divided on issues including US plans to install a missile defence shield in eastern Europe and Moscow's policy towards the pro-Western ex-Soviet state Georgia.
In an interview ahead of his visit, Obama said he believed "Putin has one foot in the old ways of doing business and one foot in the new." By contrast, Obama said he had "a very good relationship" with new President Dmitry Medvedev.
The comments were interpreted in some quarters in Russia as an attempt to split Russia's tight ruling tandem.
The second day of Obama's visit to Russia will also see him give a speech to the progressive New Economic School where Russian liberals hope the US president will lay out a vision for civil society in the post-Soviet world.
Medvedev and Obama had on Monday announced a breakthrough deal for US military transit for Afghanistan across Russia.
The former Cold-War-era foes also issued a declaration on replacing a key disarmament treaty -- including figures for major cuts in nuclear warheads.
The declaration signed by the presidents pledges to reach a new nuclear arms reduction pact to replace the 1991 Strategic Arms Reduction Treaty (START). Obama said it provides for cuts of "up to a third" from current limitations.
The declaration called for a reduction in the number of nuclear warheads in Russian and US strategic arsenals to between 1,500 and 1,675 within seven years and the number of ballistic missile carriers to between 500 and 1,100.
The cuts go beyond those levels set in the 2002 Strategic Offensive Reductions Treaty (SORT) which calls for both countries to reduce the number of deployed warheads to between 1,700 and 2,200 on either side by 2012.
"The declared reduction is a real agreement and it suits everyone," said Alexei Malashenko, analyst with the Carnegie Centre in Moscow.
The Afghanistan agreement means Russia has authorised the use of its airspace for the transit of US troops and arms, a major boost for Obama's bid to step up the fight against the Taliban.
The deal permits up to 4,500 military flights per year, or about 12 per day, which can be loaded with troops, firearms, ammunition, military vehicles and spare parts, a senior US official said.
The official said military flights would not be charged air navigation fees and they would not stop on Russian territory.