Dec. 2 (Bloomberg) -- NATO foreign ministers agreed to resume limited ties with Russia and ruled out further expansion of the alliance in the near term, handing an early diplomatic challenge to President-elect Barack Obama.

Western European countries led by Germany maintained a veto on fast-track membership for Georgia and Ukraine and successfully pushed for an end to the U.S.-inspired policy of “no business as usual” with the Kremlin that was proclaimed after Russia’s war with Georgia in August.

“Allies agreed on what I would qualify as a conditional and graduated reengagement with Russia,” Secretary General Jaap de Hoop Scheffer told reporters after a North Atlantic Treaty Organization meeting in Brussels today.

Bids by western European allies to thaw relations with Russia will pose a test for Obama after he takes office Jan. 20. While promising to re-energize U.S. alliances during the election campaign, Obama also backed the NATO aspirations of Georgia and Ukraine, two former Soviet republics that Russia regards as part of its sphere of influence.

De Hoop Scheffer said he was authorized to explore resuming political contacts with Russia and to host an informal meeting between representatives of the 26 allied governments and Dmitry Rogozin, Russia’s ambassador to NATO.

NATO Expansion

Post-Soviet Russia was powerless to oppose NATO’s embrace of 10 eastern European countries -- including the remaining members of the Warsaw Pact and the three Baltic republics -- between 1999 and 2004. Enriched by oil and natural gas exports, Russia is now drawing the line.

To drive that point home, Russia waged a five-day war against Georgia in August in response to a pre-emptive artillery barrage by Georgian forces. The war ended with two Georgian republics loyal to Russia declaring their independence and with Russian troops within 40 kilometers (25 miles) of Tbilisi, Georgia’s capital. Russia took two months to withdraw the bulk of its troops, and Georgia says two border enclaves are still in Russian hands.

In the wake of that war, NATO halted high-level contacts with Russia and said it may bolster contingency planning to defend eastern European allies such as Poland and the Baltic states.

‘Clear Conscience’

Attending a meeting of allied foreign ministers for the last time, Secretary of State Condoleezza Rice said the U.S. has nothing against sending out feelers to Russia.

“This isn’t an issue of isolating Russia but it is an issue of what kind of contacts are appropriate,” Rice told a press conference. She dismissed suggestions that the U.S. and European allies provoked the Kremlin by expanding NATO into former Soviet territory.

“My conscience is clear,” Rice said. “We did everything we could to try and welcome a new Russia into the trans-Atlantic space. I still think that is the future.”

Italian Foreign Minister Franco Frattini called for a summit of NATO government chiefs next April -- Obama’s first -- to decide to restart formal NATO-Russia meetings. “The time has come to resume negotiations,” he said.

Still, the April summit will be a “family affair,” with no plans to invite Russian President Dmitry Medvedev, De Hoop Scheffer said. Vladimir Putin, then the Russian president, attended NATO’s Bucharest summit in April.

European Security

Russia is seizing on the clash over Georgia and Obama’s election to call for a reassessment of European security arrangements, including NATO, that date back to the start of the Cold War.

The U.S. sees no need for a trans-Atlantic security parley until Russia makes concrete proposals, a senior American official told reporters in Brussels yesterday.

That stance puts the U.S. at odds with French President Nicolas Sarkozy, who last month called for a summit of the Organization for Security and Cooperation in Europe -- a 56- nation forum that includes the U.S. -- to take a fresh look at European security.

U.K. Foreign Secretary David Miliband rejected concerns that the handling of Russia has split the alliance.

“I don’t accept that NATO is fractious and divided,” Miliband said. “NATO is united in saying that the rule of law and not the rule of force is the way forward in the region.”

No Membership Road Maps

Georgia and Ukraine, meanwhile, continued to see their plea for pre-membership status blocked by western European governments dependent on Russian energy supplies. German Foreign Minister Frank-Walter Steinmeier said it is too early to go beyond an April offer of membership sometime in the future, without setting a precise road map.

“There is no reason to go any further,” Steinmeier said. Still, he said, “there is nothing standing in the way of using the time to help Georgia and Ukraine along the way with their reforms.”

After failing to push through the pre-entry plans in April, the U.S. is now emphasizing practical steps to help Georgia and Ukraine meet NATO’s democratic and military standards by pursuing annual reform programs. Foreign ministers from the two countries meet NATO officials tomorrow.

Separately, the European Union today opened an inquiry into the causes of the Russia-Georgia war. It will be led by Heidi Tagliavini of Switzerland, a former United Nations special representative to Georgia.

To contact the reporters on this story: Mark Deen in Brussels at markdeen@bloomberg.net; James G. Neuger in Brussels at jneuger@bloomberg.net.

Last Updated: December 2, 2008 14:33 EST