Russian President Dmitry Medvedev, left, welcomes U.S. President Barack Obama in the Kremlin on Monday. (RIA-Novosti, Vladimir Rodionov, Presidential Press Service/Associated Press)U.S. President Barack Obama and Russian President Dmitry Medvedev signed an agreement Monday to cut their nuclear weapons stockpiles by as much as one-third and vowed to "re-set" relations between the two countries.

Following a four-hour meeting at the Kremlin, the two leaders announced they are aiming to cut deployed nuclear warheads to about 1,500.

"Within seven years after this treaty comes into force, and in future, the limits for strategic delivery systems should be within the range of 500-1,100 units and for warheads linked to them within the range of 1,500-1,675 units," the framework agreement says.

U.S. President Barack Obama, wife Michelle, and their daughters Sasha, left, and Malia, right, arrive in Moscow on Monday. (Haraz N. Ghanbari/Associated Press)Under current treaties, each country is allowed a maximum of 2,200 warheads and 1,600 launch vehicles.

The pact is meant as a guide for negotiators as the two nations work toward a replacement pact for the Strategic Arms Reduction Treaty (START I), which expires on Dec. 5.

A White House statement said the treaty includes "effective verification measures."

The framework was one of eight agreements the two leaders committed to at the first day of the two-day summit in Moscow.

Others agreements include:

• More co-operation related to public health and medical research.
• A commission to try to account for missing service members from conflicts dating back to the Second World War.
• Resuming military co-operation that will allow exchanges between the two countries and war game exercises.
• A pact to allow the U.S. military to enter Russian airspace to transport troops and equipment to Afghanistan.
• Working together to improve the economy and social structures in Afghanistan while also fighting drug traffickers.

Medvedev characterized the meeting as a "first, but very important step in the process of improving full scale co-operation between our two countries which should go to the benefit of both states."

"We have agreed we will go forward. We will make decisions that are needed for the relations of our two countries," he said.

The U.S. and Russia must leave "behind the suspicion and the rivalry of the past so that we can advance the interests that we hold in common," Obama said.

"We must lead by example, and that's what we are doing here today. We resolve to reset U.S.-Russian relations so that we can co-operate more effectively in areas of common interest," he said.

Missile defence system

But though the Russian president called the agreement to reduce nuclear weapons stockpiles a "reasonable compromise," there remain serious differences between the two countries regarding the missile defence shield in Europe, he said.

Moscow has insisted the American missile defence program be scrapped before implementation of any replacement for START I.

Obama told reporters he still remains hopeful of the pact with Russia on missile defence. The two leaders discussed the possibility of nuclear threats coming from North Korea and Iran, he said.

On Friday, Dmitry Peskov, a spokesman for Vladimir Putin, the current prime minister and former president, said the Kremlin would not negotiate a replacement to START I unless Obama clarifies plans for the defence system to be based in Poland and the Czech Republic.

Obama's seven-month-old administration is reviewing the planned missile defence system, which former U.S. president George W. Bush pushed for aggressively.

The U.S. president repeated Washington's position that the planned system is aimed at intercepting missiles from Iran and has nothing to do with countering "a mighty Russian arsenal," as many in Russia suspect.

Russian traditional wooden dolls, matreshkas, some of them depicting Russian President Dmitry Medvedev and U.S. President Barack Obama, are part of a street vendor's display in downtown Moscow. (Mikhail Metzel/Associated Press)Medvedev called it "a difficult area for our discussion," but suggested that the new openness between the two countries could help.

Relationship overhaul

Obama will meet with Putin on Tuesday.

Though protocol does not demand the president visit the prime minister, many analysts see Putin as still holding the real reins of power in Russia.

The U.S. president will also have meetings with the country's opposition leaders, meet with former Soviet leader Mikhail Gorbachev and deliver a speech to Russian students at the New Economic School.

More than 10,000 security officers were patrolling the Russian capital, where demonstrations were expected, for the visit.

Obama is travelling with his wife, Michelle, and his daughters, Sasha and Malia, during the week-long trip. They went on a tour of the Kremlin with Russia's first lady, Svetlana Medvedev, on Monday.

Following Obama's meetings in Russia, he will travel to Italy for G8 meetings and will then head to Ghana to deliver a speech.

With files from The Associated Press