The meeting here to thrash out the agenda for a summit of G8 leaders in Germany next week ended on a sour note after Russian Foreign Minister Sergei Lavrov and US Secretary of State Condoleezza Rice exchanged sharp words over Washington's plans to base parts of a missile defence shield in eastern Europe.

Although both sides welcomed the announcement that Russian President Vladimir Putin would visit US President George W. Bush for rare face-to-face talks in Maine on July 1-2, the strains were clear.

Lavrov reacted angrily to comments Rice made Tuesday that Russian concerns over the shield were "ludicrous" and he accused Washington of reviving Cold War-era tensions.

"I think that those who are professionally aware of this problem understand that there is nothing ludicrous about this issue because the arms race is starting again," Lavrov told reporters after the meeting.

The United States says the planned radar base in the Czech Republic and 10 interceptor missiles in neighbouring Poland would defend Europe against potential threats from Iran and North Korea, but Russia argues the shield threatens its security.

In a terse response to Lavrov, Rice said: "The idea is that this particular missile defence programme cannot and is not expected to be able to somehow degrade the Russian nuclear deterrent."

She said Russia's nuclear arsenal "would overwhelm quite easily anything that is anticipated now or in the future for American and European missile defence."

Lavrov and Rice were also sharply at odds over the future status of Kosovo.

The Russian minister stressed that Moscow remained totally opposed to recommendations from chief UN negotiator Martti Ahtisaari that the UN Security Council should grant Kosovo internationally supervised independence from Serbia, a traditional Russian ally.

Lavrov said he hoped Russia would not have to use its Security Council veto to block a resolution on the province.

"I hope a veto will not be necessary," he said.

Rice said the Western powers were united in their support for the plan and would not accept Kosovo being reincorporated into Serbia.

"We and several of my European colleagues here believe that the Ahtisaari report provides the right basis for resolving the issue of status for Kosovo," she said.

Kosovo has been under UN control since 1999, after a NATO bombing campaign helped to force the withdrawal of Serb forces carrying out a brutal crackdown on ethnic Albanians.

Lavrov and Rice crossed swords again later at a meeting of the so-called diplomatic Quartet working to bring about peace in the Middle East, with the Russian minister warning that a sharp increase in US military aid earmarked for Lebanon could "destabilise" the country.

Rice retorted that Washington was complying with a UN Secretary Council resolution calling for reinforcement of the Lebanese army with the aid boost, which was approved by Congress last week.

Although global warming was not officially on the talks' agenda, divisions at the meeting indicated it was unlikely that the G8 summit in Heiligendamm on June 6-8 will produce any binding agreement on limiting greenhouse gases.

Chancellor Angela Merkel has staked Germany's presidency of the G8 on reaching a binding agreement between the leading industrial powers on limiting harmful carbon emissions -- a prospect Washington has rejected out of hand.

Rice said countries like Germany, which prides itself on its green credentials, should respect the US strategy of seeking a technological approach to reducing greenhouse gases.

G8 member Japan underlined in Potsdam that it believed a German-proposed deadline to conclude negotiations on the successor to the Kyoto Protocol by the end of 2009 were "premature."

Amid the discord, all eight nations presented a united front on Iran's nuclear ambitions.

A joint statement said the G8 was prepared to back "appropriate measures" if the Islamic republic failed to halt uranium enrichment.

Iran says it is solely trying to produce nuclear energy, but Washington believes it is trying to develop atomic weapons.

The foreign ministers of Afghanistan and Pakistan were invited to the Potsdam meeting and backed a G8 initiative, underlining "their common interest in working together to promote peace, security and development in the region."

The G8 summit will be attended by the leaders of Britain, Canada, France, Germany, Italy, Japan, Russia and the United States.

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