However, at the start of this year, the tension between Washington and Moscow over the US plan to build a missile defence shield in central Europe suddenly reached new heights -- even to the extent of compelling political analysts to start discussing the resumption of the cold war.

Suddenly, US-Russia relations were at their the lowest in the post-cold war period. Ostensibly, the credit for this tense situation went to the policy-makers in the Pentagon, who wanted to station 10 interceptor missiles in Poland and a targeting radar in the Czech republic, countries that lie close to the Russian border and, during the Cold War, were under the Soviet control.

The apparent objective of this missile shield project, as propagated by the Pentagon, was to protect against any missile attack from terrorists and "rogue" states, particularly Iran and North Korea.

Despite the Americans' consistent assertions that the missile shield was not directed against Russia, the Putin camp started fiercely opposing this proposal with clear warnings of a retaliatory action plan.

The situation almost reached the point of a direct, personal clash between Bush and Putin and, just before this month's G8 summit in Heiligendamm (Germany), political pundits were expecting further deterioration in the relations between the two sides.

But, with a clever stroke, President Putin has changed the whole scenario and put the Americans on the back foot. During his one-to-one meeting with President Bush on the sidelines of the Group of Eight summit, Vladimir Putin offered the United States the use of a Russian radar station in Azerbaijan, a former Soviet satellite on the Iranian border, as a part of the planned missile defence system in Europe.

The offer for joint usage of the rented Gabalin base in Azerbaijan was a startling proposal that caught President Bush and political observers by surprise. President Putin argued that a joint US-Russia base at Gabalin would provide cover to all of Europe rather than just parts of it, and that any missile debris would fall in the ocean rather than on land in Europe.

The stunned Bush had no immediate answer to this offer except labelling it as "interesting," and proposing that experts from the two countries should examine it before starting a formal debate on it.

"As a result of our discussions we both agreed to have a strategic dialogue, an opportunity to share ideas and concerns between our state departments, defence departments and military people," is how President Bush commented after his meeting with his Russian counterpart.

The spontaneity of Putin's offer practically put President Bush in a very difficult situation, and he appeared clueless on how to react to such a comprehensive offer that apparently addressed all the concerns being propagated by him in favour of the proposed missile shield system in Europe.

By offering this proposal, President Putin has achieved two objectives. One, it has successfully defused the impending crisis between the two sides, and put President Bush in a defensive position on the question of a missile shield system.

For the time being, until the military experts prepare the viability report on the proposal of a joint US-Russia base in Azerbaijan, the Bush camp will be psychologically bound to refrain from making noises over the issue.

And secondly, it has provided an opportunity to President Putin to rally popular support at home, in advance of the parliamentary and presidential elections in December and March respectively.

President Bush's agreement to review and consider this proposal could have been interpreted in Russia as a sign of Putin's renewed strength and stature as a world leader, at par with his American counterpart.

In fact, President Putin has shrewdly used the whole missile shield episode to his advantage. In the first place, he kept on augmenting and ballooning up the missile shield system as a threat to Russian security, to the extent of threatening the revival of the cold war.

And then, on the occasion of the G8 summit, where the richest global players were present, he suddenly muffled President Bush by making a surprise offer of joint US-Russia radar base.

Ostensibly, Putin now has the upper hand in the on-going missile shield controversy, and Bush must be desperately trying to find a face-saving formula. Both leaders are supposed to meet again in early July, in a much more relaxed setting of the Bush family home at Kennebunkport in Maine, and there will be sufficient time for the two to agree on something "concrete" before leaving the stage next year.

But, in this regard, President Bush must be looking forward to a helping hand from President Putin, who is riding high on the new-found wave of ecstasy after the G8 summit.

Dr. Imran Khalid is a freelance contributor to The Daily Star.