"The position of Russia and the US on the issue are much closer than they seem," said Putin.

"We do not need to be convinced of the fact that there should no proliferation of weapons of mass destruction," he said.

"President Bush and I have a full understanding on this," he said.

"This is exactly why we can call each other friends."

On a more cautious note, however, Putin said the United States must not use Russia's nuclear cooperation with Iran as a pretext for pushing Russian companies operating in the country out of the lucrative market.

"On Iran, we are against the pretext of using the nuclear weapons of program in Iran as a lever in unfair business competition against us," said Putin.

"But we will continue working with all, including the United States, in order to prevent the proliferation of weapons of mass destruction everywhere, including Iran," said Putin.

Russia has vowed to complete construction of Iran's first nuclear reactor at Bushehr, despite US concerns that Tehran was using the project as a cover for a covert nuclear weapons program.

Bush, for his part, told a joint press conference that both sides were "concerned" about Iran's nuclear program.

"Russia and the United States have mutual concerns about the advanced Iranian nuclear program," Bush said.

"I appreciate Vladimir Putin's understanding of the issue and his willingness to work with me and others to solve this potential problem," the US president added.

Moscow and Washington intend to continue their strategic partnership despite disagreements over Iraq, Russian President Vladimir Putin said Sunday after talks here with US counterpart George W. Bush.

"Of course we are aware of the questions being raised as to whether relations between Russia and US will withstand the test of time," Putin said at a joint press conference following their first direct meeting since the war.

"We reiterated with President Bush that there is no alternative to our continued strategic partnership," said Putin.

"Our relations are stronger than the events that tested it," said Putin.

The informal summit between Bush and Putin lasted for just over an hour in Putin's native city amid its 300th anniversary celebrations.

Putin and Bush also signed formal documents putting into effect a stragic arms reduction treaty that slashes the two sides nuclear weapons to a range of 1,700 to 2,200 nuclear warheads by the year 2012.

"This treaty also improves the regime of non-proliferation," said Putin.

"This is all more appropriate in the fight against international terrorism," he said. "But now we must work on the implementation of that treaty."