US President George W. Bush embraced the plan during talks with Russian President Vladimir Putin on the sidelines of an Asia-Pacific summit here, said White House National Security Adviser Stephen Hadley.

The Russian compromise has the support of Britain, France and Germany, which have led negotiations with Iran, and Bush considers it "a good idea and potential avenue out" of the standoff, Hadley told reporters.

Iran has rejected Putin's offer to allow one of the most controversial aspects of its nuclear program -- uranium enrichment, which can be a critical step in weapons development -- to be carried out on Russian territory.

"We think that (rebuff) doesn't end it, we think that this will be an issue we will return to with the Iranians," said Hadley. "We hope that over time Iran will see the virtue of this approach, and it may provide a way out."

While Bush embraced Putin's proposal, there was no sign that the Russian leader had softened his opposition to a US push to refer Iran to the UN Security Council for possible sanctions.

There was "no specific talk of a Security Council referral" during their wide-ranging meeting, senior Bush adviser Dan Bartlett told reporters on the margins of the Asia-Pacific Economic Cooperation (APEC) forum summit.

Bush and Putin showed no sign of strains in their relationship as they opened the meeting, which Hadley said covered Syria, North Korea, terrorism, bird flu and Iraq.

"Hey, Vladimir, how are you?" Bush said, setting a casual tone from the start of their fifth meeting this year. "We've got a very important relationship. We value your advice and we value the strategic relationship we've built."

"It's very agreeable that we have virtually permanent contacts on both bilateral relations and the international agenda," said Putin, who came to APEC hoping to convert Russia's wealth in natural resources into regional influence.

Washington charges -- and Tehran denies -- that Iran has been trying to develop nuclear weapons under cover of a civilian energy program. Russia has rejected the US push for a UN Security Council referral.

Bush touched on concerns about Putin's moves to centralize political power in the Kremlin and Moscow's push to close down foreign-funded non-governmental organizations, said Bartlett and Hadley.

"The issue did come up," Bartlett said, refusing to provide further details.

"I'm confident it will continue to be a subject of discussion with the Russian government," said Hadley.

Putin's foreign policy adviser Sergei Prikhodko confirmed that the talks had centered on the nuclear programs in Iran and North Korea and also touched on developments in Iraq and "the situation around Syria."

The two leaders also discussed their efforts to fight terrorism, with the Russian leader stressing the importance of "joint steps" in this area.

Putin told Bush that violence in the breakaway province of Chechnya, which Russian troops stormed in October 1999 to try to re-establish control, had recently declined, said Bartlett.

On global trade relations, Prikhodko said Putin thanked Bush for US support for Russia's campaign to accede to the World Trade Organization (WTO) but noted Washington has not yet endorsed Russia's immediate entry into the body.

"A few practical problems remain" on that issue, he said, without elaborating.

Bartlett mentioned enforcement of intellectual property rights as one of the issues still being discussed.

Russia and Vietnam are the only two economies in the 21-member APEC forum that have yet to join the WTO.

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