MOSCOW - U.S. President George W. Bush, in an interview broadcast on Thursday on the eve of talks with Vladimir Putin, said he intended to persuade the Russian leader to work towards a peaceful settlement in separatist Chechnya.

Bush, interviewed by NTV television, also gave full backing to Putin in his handling of last month's theatre siege, in which security forces used gas to subdue armed rebels and rescue hostages. A total of 128 hostages and 41 guerrillas died.

"As regards Chechnya, we still hope a solution can be found in a peaceful way," Bush said, his comments translated into Russian. "This is Russia's domestic problem. In my work with Vladimir Putin, I'll be trying to direct him towards a peaceful solution to the problem."

Bush meets Putin in the Kremlin leader's native St Petersburg after attending the Prague NATO summit, where seven ex-Communist east European states were on Thursday invited to join the alliance.

The U.S. president spends less than three hours in Russia's second city, his second visit this year, before travelling on to Lithuania and Romania, both among the new NATO entrants.

Bush, who has repeatedly praised Russia's full backing for Washington's declared war against terrorism, rejected any attempt to blame Putin for the high death toll in the theatre siege.

"...I think that when terrorists cause civilian deaths, a true leader must be firm. My friend Vladimir Putin found himself in an utterly difficult situation: the terrorists were threatening to kill 800 people. He did his utmost and he did it to save lives, to save people," Bush said.

"I have heard that some people are blaming what happened on Russia. The terrorists should be blamed. They should pay for what they did."

PEACEFUL SETTLEMENT

But he restated his contention that Moscow had to work ultimately for a peaceful settlement with Chechen separatists.

"I think that one thing does not rule out the other," he said. "One can call the terrorists and murderers to account but at the same time resolve the situation by generally peaceful means."

Putin, his actions to end the siege approved overwhelmingly in opinion polls, has since fiercely defended Russia's policy of refusing to negotiate with Chechnya's exiled elected leaders. He says the rebels who have been battling Russian forces in two post-Soviet wars are part of a world-wide Islamist conspiracy.

Putin has called for faster implementation of a plan to draft a Chechen constitution and put it to a referendum.

In other comments to the daily Izvestia, Bush said he would also assure Putin that Russia had nothing to fear from NATO's second expansion to include three ex-Soviet Baltic states.

Putin has dropped Russia's longstanding objections to NATO enlargement, acknowledging that it can do nothing to stop it. But Russian officials remain concerned that Estonia, Latvia and Lithuania, all bordering Russia, will now be members.

Bush also said he would tell Putin that Washington saw the dispatch of arms inspectors to Iraq as a step towards disarming Baghdad under the terms of a U.N. Security Council resolution.

"I will tell Putin that I am resolved on this," he told Izvestia. "If Saddam does not abide by the resolution's terms, we will have to think about new steps. And if we have to take military action, as we have said, we will consult our allies."