Iraq and Iran featured high in
Sunday's talks

Putin was speaking at a joint press conference after an informal summit with his US counterpart George W Bush in St Petersburg on the sideline of the city’s 300th anniversary celebrations.

It was the first time the two leaders meet since they locked horns over Washington’s decision to launch war against Baghdad.

“Despite all the differences on Iraq, we were not only able to preserve our personal relations but also to preserve and even strengthen our mutual co-operation,” said the Russian leader.

For his part, Bush side-stepped Moscow’s concerns that it could lose lucrative Iraqi oil contracts.

“Russia has had a long history of involvement in Iraq and the Iraqi authorities, when they are firmly in place, will make the decision based upon that experience and based upon their country’s best interests,” said the US President.

Russian companies fear US oil companies could snatch big contracts signed with ousted Iraqi president Saddam Hussein.

Joint cooperation

In a joint statement Bush and Putin vowed to step up their fight against what they described as “global terrorism and the proliferation of weapons of mass destruction”.

The statement said the two countries will focus on co-operation in a joint missile defense project. Moscow had initially opposed Washington’s plans to build a limited missile defence shield.

Earlier Putin had said Washington and Moscow’s positions on Iran are “closer than they seem."

But Putin said Washington could not use Moscow’s nuclear cooperation with Tehran as a pretext for pushing Russian companies operating in the country out of the lucrative market.

US-Russian ties were strained by
Washington's war against Iraq

“We are against the pretext of using the nuclear weapons programme in Iran as a lever in unfair business competition against us,” said Putin.

Russia has vowed to complete construction of Tehran’s first nuclear reactor at Bushehr, despite US accusations that Iran is using the project as a cover for a covert nuclear weapons programme.

Tehran has repeatedly denied the allegations.

During their meeting Putin and Bush signed formal documents putting into effect a strategic arms reduction treaty that cuts the two sides’ nuclear weapons from 2,200 to 1,700 nuclear warheads by 2012.

Putin said the treaty was another step towards non-proliferation and the fight against “international terrorism”.

For his part, Bush said both sides were “concerned” about Iran’s nuclear programme. He also urged North Korea to dismantle its nuclear weapons programme.

“We strongly urge North Korea to visibly, verifiably and irreversibly dismantle its nuclear weapons programme,” said the US President.

The two leaders reaffirmed their commitment to Washington’s “war on terror” in Afghanistan. Putin said the meeting with Bush coincided with what he described as very dangerous and complex developments.

Before Sunday’s meeting, US officials had said the talks in the Grand Konstantinovsky palace were mainly aimed at rebuilding ties between Moscow and Washington.

Bush arrived in St Petersburg on Saturday where he met German Chancellor Gerhard Schroeder, whose staunch opposition to the war against Iraq also strained ties with Washington.