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Russia says ready to retaliate after U.S. talks end without deal

By Andrew Osborn

By Andrew Osborn

MOSCOW (Reuters) - Russia said on Tuesday that it reserved the right to retaliate against the United States after a meeting in Washington ended without an agreement to return Russian diplomatic property the U.S. had seized.

Barack Obama, then U.S. president, ordered the seizure of two Russian diplomatic compounds in New York and Maryland and the expulsion of 35 Russian diplomats in December over what he said was their involvement in hacking the 2016 U.S. presidential election campaign, something Russia flatly denies.

President Vladimir Putin decided not to retaliate at the time, saying he would wait to see what the new administration of Donald Trump would do.

But Trump, besieged by a regular stream of questions about his associates' purported links to Russia, has scant room for maneuver. He risks being accused of being overly friendly to Moscow if he hands back the compounds without getting something politically substantial in return.

Moscow had said a lot would depend on the outcome of a meeting in Washington on Monday between Russian Deputy Foreign Minister Sergei Ryabkov and U.S. Undersecretary of State Thomas Shannon. The meeting ended without agreement.

The Russian Foreign Ministry said its patience was wearing thin.

"The Russian side stressed (in the meeting) that if Washington does not remove this and other irritants, including continued obstacles to the work of our diplomatic institutions, we reserve the right to take retaliatory measures based on the principle of reciprocity," it said in a statement.

Russia has complained that U.S. officials are not issuing visas to its diplomats, preventing it from replacing its staff who were expelled in December.

Deputy Foreign Minister Ryabkov said he had submitted a list of things that needed to be done to improve battered US-Russia ties. Reports of a breakthrough being close were wide of the mark, he said.

"To say we are on the brink of finding a solution and sorting out this situation would be an exaggeration," Ryabkov told the TASS news agency. "Such unacceptable and contradictory actions cannot be left without a response."

The U.S. State Department said that the talks on areas of mutual concern had been "tough, forthright, and deliberate, reflecting both parties’ commitment to a resolution."

But though it said the talks had reflected a spirit of goodwill, it said it was clear "that more work needs to be done."

It said an agreement had been reached to hold talks focusing on strategic stability and the reduction of strategic arms, however.

(Additional reporting by Anton Kolodyazhny and Dmitry Solovyov in Moscow and by Washington Newsroom; Editing by Larry King)