President Bush and Russian President Vladimir Putin met Friday to sign the biggest nuclear arms reduction treaty ever between the two former superpower rivals, and possibly the last.

The treaty, which cuts warheads on both sides by two-thirds over ten years, "says that we're friends," Bush said in brief remarks before a Kremlin treaty-signing ceremony.

He said the pact would help "cast aside old doubts and suspicions and welcome a new era."

Putin cited "constructive and profound" talks leading up to the signing of the document in the Kremlin, once itself a site targeted by U.S. intercontinental missiles.

Bush and Putin spoke briefly after a private one-on-one session and as they gathered with aides and advisers around a long table for a final round of talks before the signing.

Earlier, Putin greeted Bush in the Green Parlor of the Grand Kremlin Palace, the official greeting room of the Russian presidency. They shook hands, chatted briefly and exchanged laughs amid the whirring of cameras before journalists were ushered out.

The pact will slash each nation's arsenal of strategic nuclear warheads to between 1,700 and 2,200 over the next decade.

That is a third of the current arsenals of about 6,000 each, and only about a tenth of the long-range nuclear weapons at the height of the Cold War.

Bush began his first full day in Russia with a visit to the Tomb of the Unknown Soldier, just outside a Kremlin wall off Red Square.

As Bush and members of his party stood and watched, a broad white ribbon that read, "From the President of the United States on behalf of the American people" was draped across the wreath by a Russian soldier. A military band played somber music.

Bush walked forward and adjusted the ribbon slightly then stood at attention, hand over his chest, as the band played the U.S. national anthem. He put his hand down but stayed at attention as the band played the Russian anthem.

Bush's motorcade then entered a gate to the Kremlin, the walled city that houses Russia's government center, for his meeting with Putin.

"Old arms agreements sought to manage hostility and to maintain a balance of terror. This new agreement recognizes that Russia and the West are no longer enemies," Bush told members of Germany's parliament in Berlin on Thursday.

Russia was the second stop on Bush's six-day, four-country trip. He also will travel to France and Italy. While in Russia, the president will visit St. Petersburg.

The arms-reduction pact was the centerpiece of the trip. But it puts into formal language reductions that were already in the works — making its political value as important as the reductions themselves.

Bush and Putin last November agreed to the levels, which are close to ones that former President Clinton and Russian President Boris Yeltsin outlined in 1997.

Both sides have far more strategic nuclear warheads than they need, and Russia has more than it can afford to maintain.

The agreement is in treaty form, as Putin had wanted. But it allows either side to decide what to do with the warheads removed from missiles, long-range bombers and submarines. No warheads would have to be destroyed, as Putin had wanted.

The three-page treaty has a preamble and just five articles. Article III establishes a commission to ensure the terms are carried out and to handle any other issues that arise, according to a summary obtained by The Associated Press.

On Thursday, Bush traveled from the old East-West divide of Berlin to the heart of the former Soviet Union. He arrived in Moscow in the evening, standing on a small red carpet fringed in gold as a Russian military band played the American national anthem.

Hundreds of Communists and leftists staged a noisy protest at the U.S. Embassy here in advance of Bush's arrival.

Before leaving for Moscow, Bush said he would urge Putin to stop dealing with Iran, a country he said is governed by extremists.

U.S. officials said Iran recently conducted a successful flight test of its Shahab-3 ballistic missile and intends to develop missiles that could reach targets in Europe.

Russia is helping build a nuclear reactor in Bushehr and scientists have contributed missile expertise to Iran. Russia has told U.S. officials the Bushehr facility is simply a civilian reactor, an assertion the White House questions.

Russia's foreign minister, Igor Ivanov, denied his country is providing improper assistance to Iran.

Such accusations "don't correspond to reality," he said on Russia's NTV television station. "Russia firmly adheres to the principle of non-proliferation of nuclear weapons."

Russia also has relations with Iraq and North Korea, the other two countries Bush includes in an "axis of evil."

The two countries disagree about nuclear proliferation, although relations have been warming since Sept. 11.

Trade is another issue. Russia disputes U.S. tariffs on its steel and the United States objects to Russian restrictions on its poultry.

U.S. officials said the president could offer little optimism for now on Russia's longstanding efforts to win repeal of the U.S.Jackson-Vanik trade amendment, which ties Russia's trade status to Jewish emigration.

Legislation to lift the restrictions is bogged down in Congress, partly as a result of the poultry dispute.

Not expected to be a sticking point this time: Bush's unilateral withdrawal from the 1972 Anti-ballistic Missile treaty so he could build a national missile defense.

Putin had opposed the withdrawal — which takes effect next month — but lately has softened his opposition, accepting the U.S. decision with resignation. But speaking on ORT television Thursday night, Ivanov called the U.S decision to unilaterally withdraw a "mistake."

Russia also wants the United States to declare Russia a market economy to help speed Moscow's entry into the World Trade Organization, the Geneva-based body that sets and polices the rules for international trade.

WTO membership would make Russia a more predictable place for western investment. But, while the Bush administration has offered help, it does not seem likely that Russia would be able to join the trading organization anytime soon.

After its financial crash in 1998, Russia's economy has been improving. It registered its third year in a row of gross domestic product growth of up to 5 percent — a time when major economies worldwide were slowing down.

Much of the improvement came from higher oil prices and devaluation of the Russian ruble.