http://news.yahoo.com/s/ap/20071025/..._russia_summit

LISBON, Portugal - Russian President Vladimir Putin warned strongly Thursday against imposing new international sanctions on Iran, in words that appeared to be a response to newly announced U.S. measures to punish Tehran.

Putin spoke hours after Washington cut off Iranian military and banking institutions from the American financial system. The U.S. said the sanctions were in response to Iran's defiance of U.N. demands to curb its nuclear program and its alleged support for terrorism.

Arriving for a summit with European Union leaders, the Russian leader did not make any direct reference to the U.S. announcement., but he said the standoff with Iran will have to be resolved through patient talks.

"Why worsen the situation and bring it to a dead end by threatening sanctions or military action?" Putin asked. "Running around like a madman with a razor blade, waving it around, is not the best way to resolve the situation."

Russia, which is building Iran's first nuclear power plant, has opposed a new push for a third round of U.N. sanctions over the Iranian defiance of a Security Council demand that it suspend enriching uranium.

The U.S. and its allies suspect Iran is secretly trying to develop nuclear weapons, a charge that the Tehran regime denies. Iran says it is only working to produce fuel for nuclear reactors to generate electricity and insists it will not give up uranium enrichment.

Speaking at a news conference after talks with Portuguese President Anibal Cavaco Silva, Putin pointed to the long negotiations with North Korea that led to an agreement earlier this year for that communist nation to begin dismantling its nuclear facilities.

"Not long ago it didn't seem possible to resolve the situation with North Korea's nuclear program, but we have practically solved it relying on peaceful means," he said.

Putin has rebuffed Western calls for more sanctions against Iran by saying he has seen no evidence the Iranians are working on atomic weapons. But he said Thursday that when he visited Tehran last week, he reaffirmed Russia's strong opposition to the spread of such weapons.

On another matter, Putin warned against independence for Kosovo, a predominantly ethnic Albanian province of Serbia that is another difficult issue between Russia and the West.

A Western-backed plan would grant the province internationally supervised independence, but Putin said giving in to independence demands from Kosovo's Albanians would encourage separatist trends in many European nations and former Soviet states.

"Why keep rocking the foundations of the international law, encourage and develop separatism in Europe and the ex-Soviet space?" he said.

Putin's annual meeting with EU leaders Friday seemed likely to be one of the most contentious in recent years, with a long-standing series of disagreements standing in the way of any partnership agreement between Russia and the 27-nation bloc.

Their recent summits have seen a steady decline in relations because of disputes over trade, energy, human rights, conflicts in the Balkans and other issues.

Just two minor deals were expected to be announced after Friday's meeting — one to increase cooperation in fighting drug use and trafficking, the other to boost Russian steel exports to western Europe.

Negotiators were not expected to resolve disagreements over energy, aviation, trade and human rights. The issue of visas for Russians traveling to the EU also is thorny.

Putin lamented that Moscow had good relations with some countries — Romania, for example — but prickly ties with others.

"The fewer barriers there are, including visa, the better," he said.