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U.S. weighs sanctions, Russia nuclear deal at risk

WASHINGTON (Reuters) - Washington may scrap a civil nuclear pact with Moscow and consider sanctions as punishment for its military action in Georgia, the White House said on Thursday, raising pressure on Russia to comply with a ceasefire.

But major U.S. exporters urged the Bush administration to move slowly and not act unilaterally, underscoring the limited options the West has in dealing with Russia due to extensive business, economic and energy ties.

“We are in the process of re-evaluating our relationship with Russia,” White House spokeswoman Dana Perino told reporters. “We are doing that in concert with our international partners.”

In Paris, French Foreign Minister Bernard Kouchner said European Union leaders are considering sanctions against Russia ahead of a summit on Monday to discuss the situation in Georgia, which hosts two major energy pipelines and has ports on the Black Sea.

One option Washington is considering is nixing the nuclear deal signed in May that would open up the booming U.S. nuclear market and Russia’s vast uranium fields to firms from both countries by removing Cold War-era restrictions.

“I don’t think there is anything to announce yet, but I know that that is under discussion,” Perino said.

She also said it was premature to say what kind of sanctions against Russia would be considered.

The United States is “not going to be rushed into making decisions without having thoroughly looked at all of the issues,” Perino said.

Exporters, which benefit from a two-way goods trade between the United States and Russia that totaled $26.7 billion in 2007, urged caution.

“We’ve been telling them to think very carefully before acting and move very cautiously and whatever you do, make sure that it’s multilateral, not unilateral,” said Bill Reinsch, president of the National Foreign Trade Council.

The council represents exporters such as Boeing Co, Caterpillar Inc, Microsoft Corp, Bechtel Corp, General Electric Co and others.

Reinsch said he thought the Bush administration had already decided it did not want Congress to act on the nuclear deal this year.


The conflict erupted when Georgian troops tried to retake the pro-Russia separatist region of South Ossetia in early August. Russia responded with a counter-attack that overwhelmed Tbilisi’s forces and occupied Georgian territory beyond the breakaway region.

Moscow has since partially withdrawn its forces and recognized South Ossetia and another breakaway region, Abkhazia, as independent, defying the West.

U.S. President George W. Bush offered up to $5.75 million to help Georgian refugees.

The Pentagon said the United States has provided Georgia with $22 million in humanitarian aid amounting to 947 tons (859 tonnes) of supplies. U.S. military planes have conducted 53 aid flights to Georgia.

Pentagon spokesman Bryan Whitman insisted the aid has been strictly humanitarian and has not involved supplies of arms or other military hardware despite accusations by Russian President Dmitry Medvedev that Washington was delivering weapons to Georgia.

Perino at the White House dismissed as “patently false” a charge by Russian Prime Minister Vladimir Putin that someone in the United States provoked the conflict to help one of the two candidates in the U.S. presidential election in November.

Republican John McCain and Democrat Barack Obama are battling to replace Republican President George W. Bush.

At the Democratic Party convention in Denver, vice presidential nominee Sen. Joe Biden, who also chairs the Senate Foreign Relations Committee, met Georgian officials and pledged that if he and Obama were elected, they would help their country.

“The Russians are trying to do every solitary thing they can to hurt your economy,” Biden said at a meeting with the Georgians arranged before he was named Obama’s running mate.

Additional reporting by Doug Palmer, Tabassum Zakaria, Susan Cornwell and David Morgan; Editing by Kristin Roberts and John O’Callaghan