Visiting U.S. President Barack Obama on Tuesday praised Russia`s most powerful politician, Prime Minister Vladimir Putin, as the two leaders met for the first time, saying there was an excellent opportunity to improve U.S.-Russia relations, according to Reuters.

Visibly awkward, the two men exchanged pleasantries at the start of a meeting at Putin`s forest residence outside Moscow overshadowed by Obama`s criticism of Putin last week in a pre-trip interview as a man with one foot stuck in the past.

"I am aware of not only the extraordinary work that you`ve done on behalf of the Russian people in your previous role as prime minis-, uh, as president, but in your current role as prime minister," Obama said.

Putin, looking down and mostly avoiding eye contact with Obama, said there had been periods of greyish mood and confrontation in U.S.-Russia relations but added:

"We link hopes for development of our relationship with your name."

Obama`s meeting with Putin, a former KGB spy who served as president from 2000-2008 before handing over the top Kremlin job to his hand-picked successor Dmitry Medvedev, follows talks on Monday with Medvedev.

They produced agreements on a target for cuts in nuclear arms, a deal to let U.S. troops fly across Russia to fight in Afghanistan and the establishment of a joint governmental commission to improve relations between the two former Cold War superpowers.

On the second day of his visit to Russia, Obama was also due to deliver a major speech on democracy, the global economy and the U.S.-Russian relationship to students at Moscow`s New Economic School.

Russian media, which mostly take their cue from the Kremlin, stuck to a low-key factual account of the U.S. leader`s visit on Tuesday, avoiding any kind of "Obamamania" and concentrating on the agreements reached.

Opinion polls show that most Russians distrust the United States and are not yet convinced by Obama.

Business leaders traveling with Obama want to use the visit to boost trade and investment. Russian trade with the United States was just $36 billion in 2008, the same amount as with Poland, and investment has lagged that of European competitors.

Obama and Medvedev will attend a summit of Russian and U.S. business leaders later on Tuesday.

When asked about the center of power in Russia on Monday, Obama stuck to a diplomatic script on Medvedev and Putin, who stayed on as prime minister after anointing Medvedev and is the man who holds most political clout in Russia.

"My interest is in dealing directly with my counterpart, the President (Medvedev), but also to reach out to Prime Minister Putin and all other influential sectors in Russian society," Obama told reporters.


At a cordial news conference in the Kremlin`s vast, gilded St Andrew`s Hall on Monday, Obama and Medvedev spoke of their resolve to put differences behind them and focus on cooperating to solve global problems like the spread of nuclear weapons.

Both mentioned the issues that still divide them -- Russia`s opposition to Washington`s plans for a missile defense shield in central Europe and U.S. insistence on Georgia`s territorial integrity -- but stressed the positive aspects.

The two leaders pledged to finalize a treaty by the year-end to cut the number of deployed nuclear warheads on each side to 1,500-1,675 from levels above 2,200.

Russia said it would allow 4,500 flights a year carrying U.S. troops and weapons to Afghanistan to cross its territory free of charge, a move hailed by the U.S. side as showing Moscow`s willingness to help in the war against the Taliban.

"We have resolved to reset U.S.-Russia relations so that we can cooperate more effectively," said Obama.

Medvedev described their talks as "very useful and open, business-like conversations" and said they would aim to build a U.S.-Russian relationship worthy of the 21st century.