NOVO OGAREVO: Prime Minister Vladimir Putin said Russia was pinning its hopes on US President Barack Obama to refresh ties with the United States as the two leaders met over breakfast Tuesday.

After a pre-summit media spat, the pair sought to project a polite atmosphere as they met for the first time over a spread of Russian pancakes and black caviar on the terrace of Putin's country residents.

The US president had provoked a tart retort from Putin last week by saying the Russian premier had "one foot" stuck in the past.

Obama praised Putin -- still seen by most as Russia's de facto leader -- for his "extraordinary work" as president between 2000-2008 and now in his new post as prime minister.

Putin, a former KGB agent, told the US president in turn: "We associate your name with the hopes of developing our relations." "The history of Russian-US relations... has had different shades. There were years of a true flourishing but there were also some quite grey days and even (days of) confrontation." Obama said their talks were an "excellent opportunity to put US-Russian relations on a much stronger footing." "We may not agree on everything, but we have consultations that will serve the Russian and the American people," he added.

The two leaders exchanged brief pleasantries sitting facing journalists in gold-leaf, baroque chairs on the second floor of Putin's wood-bound home on the outskirts of Moscow.

As soon as the protocol was over Putin jumped up to and led Obama to a window looking out on the terrace set for their breakfast with traditional Russian prints, smoked Beluga and a samovar.

"We prepared a Russia-style breakfast for you!" Putin said, showing off waiters in folk costumes and musicians with balalaikas.

Obama was accompanied at the early meeting by his national security adviser, Jim Jones, Russian affairs adviser Michael McFaul and Undersecretary of State William Burns. At Putin's side was Foreign Minister Sergei Lavrov.

Their meeting ran two hours -- a half-hour longer than expected -- and was followed by Obama delivering a keynote address at a progressive Russian economic university.

Obama was scheduled to meet later with Putin's critics -- including former chess champion Garry Kasparov -- who accuse the Russian strongman of presiding over a rollback of civil freedoms during his eight years in the Kremlin.

In an interview ahead of his visit, Obama said he believed "Putin has one foot in the old ways of doing business and one foot in the new." By contrast, Obama said he had "a very good relationship" with President Dmitry Medvedev.

The comments were interpreted in some quarters in Russia as an attempt to split Russia's tight ruling tandem.

Putin hit back at Obama's comments with his own sally, saying he was not "bow-legged" and had both feet firmly turned toward the future.

Last year, Putin put forward Medvedev as his hand-picked successor to the presidency and assumed the premiership. Many experts say Putin remains Russia's main decision-maker.