US, Russia cold war hots up

~ Differences continue over missile shield for Europe and policy towards Iran

MOSCOW, Saturday (Reuters) - The United States and Russia failed to settle their differences on U.S. plans to place a missile defence shield in Europe yesterday, and Washington rejected a request from Moscow to freeze the project. U.S. Secretary of State Condoleezza Rice and Russian Foreign Minister Sergei Lavrov, after talks in Moscow, also clashed publicly on how to tackle Iran's nuclear ambitions. Lavrov called Washington's tough stance unhelpful. The talks took place against a backdrop of growing friction between the West and an increasingly assertive Russia seeking to restore its military might that has echoes of the Cold War.

Rice and U.S. Defense Secretary Robert Gates brought new proposals they said were intended to soothe concerns the missile shield threatened Russian security. The suggestions included the idea that Russia and America could have liaison officers stationed at each other's missile defense facilities as part of a broader joint effort to protect against missile attacks, U.S. officials said. But Lavrov, speaking at a news conference with Rice, Gates and Russian Defence Minister Anatoly Serdyukov after five hours of talks, said those proposals needed more study and Washington should halt work on the shield in the meantime.

“We believe that to make the joint work of Russian and U.S. experts most effective, plans on deploying ... (the missile defence system in Europe) should be frozen,” Lavrov said. Rice said talks with Poland and the Czech Republic on siting elements of the shield -- a radar station and interceptor missiles -- on their soil would continue. “We will work during this time to address Russian concerns ... We believe that we can address those concerns and we are prepared to do it,” she said.

Earlier, in remarks to Rice and Gates before the media at his dacha outside Moscow, President Vladimir Putin also urged Washington not to move ahead with its missile shield plans. Putin kept Gates and Rice waiting for more than half an hour at the dacha before greeting them. Russian officials said Putin had to take an emergency phone call, according to U.S. officials, who said the meeting was constructive.

“What you saw playing to the cameras was not indicative of the way the rest of the meeting went,” Pentagon press secretary Geoff Morrell said. Putin also said Russia might pull out of the Intermediate-Range Nuclear Forces (INF) Treaty unless it was expanded to include limits on other countries' armaments. The treaty was signed at the end of the Cold War to scrap U.S. and Russian nuclear missiles which, although they did not have the range to cross the Atlantic, could be used for nuclear strikes within Europe.

Pulling out of the treaty would theoretically restore to Russia the capability to strike European targets. Defence analysts say Russia is reviewing the treaty because it feels threatened by growing arsenals in states such as Iran, India and Pakistan, and wants the missiles to counter that. Simon Saradzhyan, an independent security analyst in Moscow, said Russia could also use the threat of quitting the treaty as a bargaining chip in its broader jockeying with the United States over security issues.

Putin will travel next week to Tehran, where he is expected to meet Iranian President Mahmoud Ahmadinejad, suspected by Western powers of trying to develop a nuclear bomb. Putin says he sees no evidence of a bomb-making programme. Lavrov said the U.S. policy of unilateral sanctions and not ruling out military action was not helping persuade Iran to be open about its nuclear plans.

“Such unilateral actions contradict our collective efforts and make them less effective,” he said. Rice said Washington would continue to impose financial sanctions on Iran that went further than United Nations measures, and would encourage others to follow its lead.

“The United States does not intend to allow Iran to use the international financial system to pursue ill-gotten gains from proliferation and or terrorism. Therefore, under American law when we find that Iranian entities or individuals are engaging in such activities, we will sanction them,” she said.