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WASHINGTON (Reuters) - Secretary of State Hillary Clinton on Thursday played down tensions with Russia over Georgia, saying they would not cloud arms control talks and Washington wanted ties with Moscow to hit a new level.
At a news conference with Russian Foreign Minister Sergei Lavrov, Clinton said "people in families disagree" and she did not want to dwell on differences over Georgia's or Russia's strong opposition to NATO military exercises there this week.
"It is old thinking to say that we have a disagreement in one area, therefore we shouldn't work in something else that is of overwhelming importance. That is just not the way we think," she said.
"We want to normalize the relationship and raise it to a new level."
Lavrov described their meeting as productive and agreed disputes must not poison ongoing arms control negotiations.
"The task of further reductions of strategic offensive weapons is too important, both for Russia and the United States, and for the entire world, in fact, to make it hostage of any particular regime anywhere," he said.
Russia briefly invaded Georgia last summer and tensions flared again this week when Georgia accused Russia of being behind a failed mutiny at a military base.
Clinton said the two discussed Georgia in their meeting, which is aimed at laying the groundwork for a July summit between President Barack Obama and President Dmitry Medvedev.
"I believe that Minister Lavrov as well as the Russian government recognize that stability and a peaceful resolution to the tensions in Georgia is in everyone's interest."
Lavrov said Russia would do all it could to help prevent new outbreaks of tension in the Caucasus, but noted that there were obvious differences with his American host.
It was Lavrov's second substantive encounter with Clinton, who in their last meeting in Geneva brought along a "reset" button to symbolize a new chapter in relations.
U.S.-Russia ties deteriorated under the Bush administration, sinking to post-Cold War lows after Moscow's invasion of Georgian territory and differences over a missile defense system planned by Washington.
With Lavrov sitting in a chair at his side in the Oval Office, Obama told reporters: "We have an excellent opportunity to reset the relationship between the United States and Russia on a whole host of issues."
Later, in a speech to the Carnegie Endowment of International Peace, Lavrov was critical of the Bush administration and said there was now a chance to get U.S.-Russia relations back on track.
"If we are serious about the need to reset our relations, then we must get rid of the toxic assets inherited from last years," he said.
Arms control is one area where both sides say they can make progress, especially in replacing a Cold War-era arms reduction treaty, called START 1, that expires in December.
Clinton said negotiators had met again this week and were making progress. Formal talks are set to start in Moscow on May 18, with the goal of having the outlines of a deal when Obama meets Russia's leader in July.
Lavrov's visit coincides with increased bickering between Moscow and NATO following the expulsion last week of two Brussels-based Russian diplomats from the military alliance.
Lavrov responded by dropping plans to attend a NATO-Russia Council meeting this month, but said on Thursday he hoped the council could soon resume its work.
The two also discussed Iran's nuclear program, which the West believes is aimed at building a nuclear bomb and Tehran argues is for generating electricity.
Clinton reiterated that Washington was laying the groundwork for tougher sanctions if Iran did not agree to a proposal by major powers to give up sensitive nuclear work.
Russia has long opposed additional sanctions against Iran and Lavrov repeated this stand.
A sticking point between Washington and Russia has been Moscow's military sales to Tehran, which Lavrov said he had discussed with Clinton and defended as "absolutely legal."
"Whatever we sell to Iran in particular is only of a defensive nature," he told the Carnegie audience.
Additional reporting by John Whitesides, Deborah Charles and Ross Colvin