Relationship between the two nations chills further as White House cites 'not enough progress on our bilateral agenda'

Relations between the United States and Russia deteriorated further on Wednesday when Barack Obama abandoned a presidential summit with Vladimir Putin that was due to be held next month, amid fury in Washington over Moscow's decision to grant asylum to the NSA whistleblower Edward Snowden.

The White House confirmed that it had decided to snub the Russian leader by pulling out of the planned bilateral meeting in Moscow, but is expected to take part in the broader G20 meeting of international leaders in St Petersburg.

Moscow reacted coolly to the decision, which had been widely expected after Putin infuriated the Obama administration by granting temporary sanctuary to Snowden, who fled to Moscow after the Chinese government allowed him to leave Hong Kong, rather than heed US calls for his arrest.

In a statement, the White House said that it had concluded there was "not enough recent progress in our bilateral agenda" to hold a US-Russia summit. It cited a lack of progress on arms control, trade, missile defence and human rights, and added: "Russia's disappointing decision to grant Edward Snowden temporary asylum was also a factor that we considered in assessing the current state of our bilateral relationship. Our co-operation on these issues remains a priority for the United States."

State Department spokeswoman Jen Psaki said the decision to abandon the summit was made after a unanimous decision by the White House national security council. A meeting between defence secretary Chuck Hagel, secretary of state John Kerry and their Russian counterparts will go ahead in Washington on Friday as planned.

In a separate announcement, the White House said Obama will visit Sweden instead, travelling to Stockholm the day before the St Petersburg summit. "Sweden is a close friend and partner to the United States," it said in a statement. "[It] plays a key leadership role on the international stage including in opening new trade and investment opportunities."

Speaking on Tuesday night, Obama said he was disappointed that Russia had allowed Swowden to stay instead of sending the former government contractor back to the US to face espionage charges.

In his first direct comments about Snowden since Russia's decision last week, the president said the situation reflected "underlying challenges" in dealing with Moscow. "There have been times where they slip back into cold war thinking and a cold war mentality," Obama said on NBC's Tonight Show.

The decision to cancel the meeting was greeted with little surprise in Moscow, where analysts and lawmakers have been predicting such a step. Presidential aide Yuri Ushakov said the Kremlin was disappointed that Obama cancelled the meeting with Putin, state news agency RIA-Novosti reported. "It's obvious that this decision is connected to the situation with the American intelligence services employee Snowden, which was not created by us," he said.

Nonetheless, the invitation to Obama to visit Moscow remains open, and Russia is prepared to co-operate with the United States on pressing issues, Ushakov said.

Nationalist Duma deputy Vladimir Zhirinovsky, perhaps the most rabid of the many critics of the United States in parliament, said the decision shows "disrespect" towards Russia.

"If you postpone or completely cancel meetings between heads of state under the pretext of the refusal to hand over one person, then relations between countries will quickly reach zero," Zhirinovsky said.

Amid the sparring over Snowden's asylum claim, his father Lon Snowden told Reuters he was confident Putin would not cave in to pressure to send his son back to the US to face espionage charges. "President Vladimir Putin has stood firm. I respect strength and I respect courage," Snowden said. "He has stood firm against the face of intense pressure from our government and I have to believe that he will continue to stand firm."

"These games of 'Well, I'm not going to go to this meeting,' or 'I'm not going to go to that meeting,' … I do not believe that President Vladimir Putin will cave to that," he said.

Relations between Washington and Moscow were already souring before the standoff over Snowden. Russia's refusal to join international condemnation of Syrian president Bashar al-Assad was a serious source of tension, hinting at the danger of cold war-style proxy conflicts between the two nations and blocking US efforts to oust the Syrian leader.

The latest White House statement also cites arms control as a growing problem. Obama's recent calls for fresh reductions in nuclear weapons fell on stony ground when he met Putin in a notably chilly meeting on the sidelines of the G8 conference in Northern Ireland. Moscow is concerned that advances in US missile defence capabilities threaten to reduce the effectiveness of its nuclear deterrent.

But hawks in Washington argue it is time for the White House to stop pretending it has a co-operative partner in the Kremlin and treat Russia as an adversary to be contained rather a country to be negotiated with. "Now is the time to fundamentally rethink our relationship with Putin's Russia," said senator John McCain after Snowden was granted asylum. "We need to deal with the Russia that is, not the Russia we might wish for."

On Wednesday, McCain repeated his call for an expansion of the Magnitsky Act, which applies US sanctions on Russian officials alleged to have taken part in human rights violations. The act has infuriated the Kremlin, which regards Washington as applying double standards on human rights

Andrew Kuchins, a Russia expert at the Washington-based Center for Strategic and International Studies, said mood was now close to a post-cold war low. "I don't think the relationship is quite as bad as it was during the Georgia war in 2008, but that is a very low bar," he said. "I wouldn't over dramatise it, and we're obviously nowhere near the Cuban missile crisis or the cold war generally, but there is no doubt we've got into a bad cycle."

Alexei Makarkin, deputy director of the Centre for Political Technologies in Moscow, said although Obama's visit became impossible for him politically after Russia granted Snowden asylum, it would not have been productive in the light of deteriorating relations. "It wasn't clear what they were going to talk about," Makarkin said.

The speed with which Russia approved Snowden's asylum request shows that the "significance of America for Russia is decreasing", and the Kremlin doesn't see a reason to try to improve relations, he added.