"We intend to dismantle conclusively the vestiges of the Cold War and to develop (an) entirely new partnership for (the) long term," Putin said during a joint press conference on the first day of a three-day summit.

"This is a new day in the long history of Russian-American relations, a day of progress and a day of hope," said Bush. "We're transforming our relationship from one of hostility and suspicion to one based on cooperation and trust."

The US leader made the day's most dramatic announcement, drawing a warm response from Putin when he declared he would cut the US nuclear arsenal to between 1,700-2,200 intercontinental warheads over the next 10 years.

"The current levels of our nuclear forces do not reflect today's strategic realities," said Bush, who came to office vowing unilateral cuts. The new level will be "fully consistent with American security."

"We appreciate very much the decision by the president," Putin -- who has long sought mutual reductions to about 1,500 warheads -- said through an interpreter. "We, for our part, will try to respond in kind."

The two leaders, united in the war on terrorism declared after the September 11 onslaught on New York and Washington, stood by their opposite views of the ABM treaty that forbids the missile shield Bush has vowed to deploy.

"It's a piece of paper that's codified a relationship that no longer exists. It codified a hateful relationship. And now we've got a friendly relationship," Bush emphasized to a packed audience in the White House's ornate East Room.

"On the issues of missile defense, the position of Russia remains unchanged, and we agreed to continue dialogue and consultations on this," said Putin, who has opposed scrapping the 1972 Anti-Ballistic Missile Treaty signed by Moscow and Washington.

US officials have said Bush is committed to developing and deploying a missile shield to thwart attacks by so-called "rogue states" like Iraq or North Korea and have said testing risks running afoul of the accord by year's end.

Asked about the military campaign in Afghanistan, the alleged hideout of suspected terrorist mastermind Osama bin Laden and leaders of his al-Qaeda network, the two leaders formed a united front.

They agreed on the need for a broad-based, multi-ethnic government once the Taliban militia is defeated by the Northern Alliance, which took Kabul unopposed overnight, and showcased ironclad determination to root out terrorism.

"Russia and America share the same threat and the same resolve. We will fight and defeat terrorist networks wherever they exist," the US president declared.

"The terrorists and those who help them should know that the justice is inescapable, and it will reach them wherever they try to hide," said Putin.

Bush, who has repeatedly said that "endless hours" of arms control talks and weighty arms control treaties are Cold War relics, moved quickly to smooth over an apparent split with Putin, who said Russian wanted deals "in a treaty form".

"I looked the man in the eye and shook his hand, and if we need to write it down on a piece of paper, I'll be glad to do that," said the US president.

"We, for our part -- for the Russian part -- are prepared to present all our agreements in a treaty form, including the issues of verification and control," said the Russian president.

Bush, playing host to the two leaders' fourth meeting and their first in the United States, was to welcome Putin to his "Prairie Chapel" ranch near the flyspeck Texas town of Crawford late Wednesday for a barbecue and an overnight stay.

Putin was to leave Crawford for New York early Thursday and then travel home to Russia.

In other developments, Bush said he would "end the application" of a 1974 measure that linked trade restrictions to Moscow's refusal to allow Jews to emigrate, noting: "Russia is a fundamentally different place."

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