Bush, Putin in friendly mood at farewell summit

By Susan Cornwell and Oleg Shchedrov

SOCHI, Russia (Reuters) - U.S. President George W. Bush exchanged jokes and a hug with Russia's Vladimir Putin on Saturday as the two leaders began a farewell summit they hope can help bridge differences on NATO and missile defence.

Showing their personal chemistry was intact despite severe strains between their two countries, Bush gave Putin a greeting hug and then joined him for a sunset stroll around the Russian leader's pine tree-lined holiday compound on the Black Sea.

With Putin stepping down next month and Bush in the twilight of his presidency, their summit in Sochi is a last chance for the two leaders to polish their legacies. Putin's successor, Dmitry Medvedev, was due to join the two later for dinner.

The U.S. leader hopes to capitalise on a less strident tone struck by Putin at a NATO summit in Bucharest earlier this week, where he attacked Western military expansion near Russia's borders but also implored: "Let's be friends, guys."

Earlier, as Bush was en route to Sochi, a White House spokeswoman said dialogue on the U.S. plans for a missile defence shield in eastern Europe -- fiercely opposed by Putin -- was "headed in the right direction".

But the spokeswoman, Dana Perino, acknowledged that more work would be needed after Sochi before a compromise deal on the shield is finalised.

Perino told reporters the two men were expected to sign an agreement in Sochi on the "strategic framework" of U.S.-Russian relations -- a document observers say is designed to encapsulate the legacy they will bequeath to their successors.

Bush was meeting the Russian leader seven years after saying he had peered into Putin's soul and trusted him. Since then, rows over Kosovo, missile defence and Russia's rights records have led some observers to talk of a Cold War-style atmosphere.