msnbc.com news services
updated 9/8/2008 2:48:07 PM ET 2008-09-08T18:48:07

In a pointed but mostly symbolic expression of displeasure with Moscow, President Bush on Monday canceled a once-celebrated civilian nuclear cooperation deal with Russia.

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Bush had sent the agreement to Congress in May for approval, after a much-heralded signing by the two nations that capped two years of tough negotiations. On Monday, he officially pulled it back, a move announced by Secretary of State Condoleezza Rice.

"We make this decision with regret," Rice said, in a statement read by spokesman Sean McCormack. "Unfortunately, given the current environment, the time is not right for this agreement."

The collapse of the deal is the first tangible penalty Washington has imposed on Russia after its war with Georgia over the two breakaway regions of South Ossetia and Abkhazia, which Moscow regards as independent states.

Georgia tried to re-take control of South Ossetia in early August but its troops were quickly repelled by Russian forces.

The United States and its allies have accused Russia of failing to comply with a French-brokered cease-fire to withdraw from Georgian soil. Moscow has said its remaining forces were peacekeepers allowed by the pact to stay behind.

Monday's move comes atop Washington's recently announced $1 billion foreign-aid package for West-leaning Georgia and a visit last week by Vice President Dick Cheney to Georgia and two other former Soviet republics, Azerbaijan and Ukraine.

Is Russia listening?
The nuclear deal was highly unlikely to win approval on Capitol Hill this year anyway, but Bush decided to actively withdraw it to make a loud statement.

Moscow, though, might not be much inclined to hear it.

The deal would have allowed Moscow to establish a lucrative business as the center for the import and storage of spent nuclear fuel from American-supplied reactors around the world. But newly flush with riches from sales of its vast energy resources, Russia may no longer have as much need for the potentially billions in revenue the deal would have provided it.

The deal would have given Washington access to state-of-the-art Russian nuclear technology, while helping it address climate change by increasing civilian nuclear energy use worldwide and keeping nuclear material out of terrorists' hands.

But in a sign of the almost Cold War-like state of U.S.-Russia relations right now, Bush determined the extensive and unprecedented cooperation spelled out in the agreement is "no longer in the national security interests" of the United States.

"The U.S. non-proliferation goals contained in the agreement remain valid: to provide a sound basis for U.S.-Russian civilian nuclear cooperation, create commercial opportunities and enhance cooperation with Russia on important global non-proliferation issues," said Rice.

'Deep concerns'
Though it has been clear for days that the Georgia invasion was the impetus for this expected decision, McCormack would not say so publicly. He said only that the administration has had "some deep concerns about Russia behavior" for some time. The U.S. embassy in Moscow informed the Kremlin last week that the move was coming.

Key lawmakers were suspicious of the deal from the start, fearing it could undermine U.S. efforts to rein in Iran's nuclear program, because of Russia's extensive business and energy — including nuclear — ties with Tehran.

Washington has been considering a range of penalties to impose on Russia, including sanctions, but U.S. business interests have warned the White House not to go too far for fear of damaging long-term ties.

The nuclear agreement is not completely dead. Bush or a future president could resubmit it for consideration by Congress, which would have 90 legislative days to block it.

The Associated Press and Reuters contributed to this report.

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