Obama Administration Offers Olive Branch to Russia and Iran

The Obama administration sought to mend fences with Moscow today after years of drifting into hostility, offering to shelve the Pentagon's contentious missile shield in central Europe and to work with the Russians on arms control and a host of other issues.

In the first major foreign policy speech from the new US administration, the vice-president, Joe Biden, stated categorically that Washington wanted to negotiate for the first time with Iran about the country's nuclear ambitions.

Biden's keenly awaited speech to the annual Munich security conference signaled a radical break with the neo-conservative foreign policies of the Bush White House.

"There is no conflict between our security and our ideals. We believe they are mutually reinforcing," the vice-president said. "The example of our power must be matched by the power of our example.

"America will not torture. We will uphold the rights of those we bring to justice. We will close Guantánamo."

But he warned his European allies that the fresh start in US foreign policy would come with a price tag.

"As we seek a lasting framework for our common struggle against extremism, we will have to work co-operatively with nations around the world – and we will need your help … America will do more. That's the good news. The bad news is that America will ask for more from our partners as well."

While Biden offered the Russians a policy shift towards co-operation and consultation, Barack Obama's national security adviser, General James Jones, told the Observer that plans to put parts of the Pentagon's missile shield in Poland and the Czech Republic – a project that Moscow says could trigger a new arms race – were being put on ice and that talks on the shield would be broadened.

"We're interested in having a fresh look at each of our [foreign] policies. We're undergoing major policy reviews. Missile defence is one of those policies being reviewed. We will consult with our friends and allies and we'll take a fresh look at it."

A senior Nato official said the president was "in no rush" to develop the missile shield. "This is an overture to the Russians. We'll need to see how the Russians respond. They're sending mixed signals."

Both Angela Merkel, the German chancellor, and the French president, Nicolas Sarkozy, emphasized the need for better relations with Moscow exactly two years after Vladimir Putin used the same Munich conference to deliver the most aggressive speech of his Russian presidency, accusing the Bush administration of seeking to rule the world and warning of a new cold war.

Biden said today: "The last few years have seen a dangerous drift in relations between Russia and our [Nato] alliance. It's time to press the reset button and to revisit the many areas where we can and should work together.

"We will continue to develop missile defenses to counter a growing Iranian capability, provided the technology is proven and it is cost effective," he added. "We will do so in consultation with our Nato allies and with Russia."

Officials and diplomats said a major concern driving the policy shift towards Russia was Iran and its nuclear ambitions.

"Obama has about a year before the Iranians are in a position to develop a nuclear bomb," the Nato official said. "The problem is the Americans do not have any leverage. They need bigger sticks and bigger carrots."

Sarkozy voiced alarm at the Iranian issue, saying it warranted more attention. He denounced last week's launch of an Iranian satellite and said Russian support was needed to force a change in Tehran.

Merkel added that Germany was ready to tighten sanctions on Iran if necessary.

Diplomats said the Iranian dispute was likely to become the biggest challenge of the Obama presidency, along with the war in Afghanistan.

"Our administration is reviewing policy toward Iran, but this much is clear: We will be willing to talk," Biden said. "We will be willing to talk to Iran, and to offer a very clear choice: continue down your current course and there will be pressure and isolation; abandon the illicit nuclear program and your support for terrorism and there will be meaningful incentives."

Ali Larijani, Iran's former chief nuclear negotiator and current parliament speaker, told the same meeting that the US was to blame for 50 years of hostility towards Tehran and that Washington would need to repent and apologize before there could be any breakthrough. There was no word of any contacts behind the scenes between the two sides.

Senior western officials said Obama's options appeared limited on Iran, adding that Israeli pressure for military strikes were the wild card should the west conclude that Tehran was on the brink of becoming a nuclear power. They added that Obama could choose to recognise Iran as a key power in the Middle East and to offer security guarantees and pledges of no regime change strategies.

"The Iranian people are a great people. The Persian civilization is a great civilization," Biden said. "But Iran has acted in ways that are not conducive to peace."