Remember those lines from Joni Mitchell's 1970s song, Blue Motel Room: "You and me, we're like America and Russia, we're always keeping score, we're always balancing the power, and that can get to be a cold, cold war"?

The lyrics definitely need updating. As President Bush heads today for a summit with Russian President Vladimir Putin, he should take the lead in shaping them. Not that the leaders need to "hold ourselves a peace talk in some neutral cafe." They're already comfortable on each other's territory. Putin visited Bush's Texas ranch in November. He will now show Bush around Moscow and his native St. Petersburg.

A core problem, though, remains. The Soviet Union collapsed more than a decade ago, but the ghosts and mind-set of the Cold War linger. Russia's establishment, in particular, has found it hard to accept its diminished status.

Bush and Putin have quietly formed a pragmatic partnership. Bush once said America and Russia shouldn't be dependent on the relationship between the two leaders, as he felt it was under Bill Clinton. He should revise that assessment. His relationship with Putin is fast becoming an engine for potentially dramatic changes.

The first, most visible evidence will come at the summit. The two will sign an agreement deeply cutting nuclear weapons from some 6,000 warheads to between 1,700 and 2,200 each. This, Bush announced, would "liquidate the legacy of the Cold War."

In fact, Bush had not wanted a formal agreement, preferring a gentleman's handshake on a verbal accord. But he did Putin this face-saving favor (even though the agreement, only three pages long, is seen by many experts as laughably lacking in detail). The reason: Putin is on a risky course. He has begun taking Russia in a new direction on the world stage: staking Russia's success and security on Western integration - economic, military and political. But he is doing so with a comparatively small circle of enlightened advisers, plus going against the country's instinctual Cold War grain.

Bush needs to help and nudge Putin, and Russia, further on this track. Bush can already take much credit for this new direction beginning with early in his presidency, when he refused to be intimidated by Putin, a shrewd former KGB officer. That includes Putin's moves to form an alliance with China and to create international momentum against the American pullout from the Anti-Ballistic Missile Treaty.

Putin's new pragmatism emerged with force only after Sept. 11, as he took the decision to give strategic, intelligence and other aid to the United States in the war on terrorism in Afghanistan. In part, this was because of the stark choice the United States gave the world: You are with us or against us.

The nuclear-weapons agreement is an important moment. But two other issues could prove more significant: NATO and oil.

First, NATO. A few days after the Bush-Putin summit, both will attend the new session of the first NATO-Russia council, being referred to as the "19+1" arrangement. It will give Russia a real say in NATO decisions, a first move toward possibly joining the alliance.

That is a breathtaking step, having Moscow in this new arrangement with NATO, which was formed to combat Moscow's growing menace. But in addition, the three formerly Soviet Baltic states, as well as Slovenia and Slovakia, could be invited to join NATO in November, along with Romania, Bulgaria, Croatia and others. Poland, Hungary and the Czech Republic are already in.

A senior NATO official said this meant the Cold War was now "kaput." But that assessment is premature. In fact, it's only a beginning. The real work is ahead.

NATO's effectiveness has been diluted with so many new members. It needs to firmly define its new raison d'etre as fighting terrorism and create standards and procedures that make it the kind of civilizing "club" the European Union has proved to be. Bush should take the lead in giving NATO new meaning and bringing Russia properly into its fold.

Oil, the other long-term issue, is perhaps the most important question mark now looming over the Russia-America relationship. It has become more urgent in recent weeks because of the Middle East crisis, which has underscored America's reliance on OPEC and particularly Saudi Arabia. A possible oil partnership could quite literally transform U.S.-Russia relations into a solid partnership lashed with business ties.

The bottom line: Russia has huge reserves of oil, and the USA would like to tap into them. It is far from a perfect match. Among the many potential pitfalls: transportation difficulties, Russia's continuing economic mess and the bad experiences of American businesses that invested in Russia in the 1990s.

Still, the idea is far more probable today. If Russia's economy were eventually stabilized and underpinned by wealth from properly managed oil sales, Russia could in time join other clubs such as the World Trade Organization, as China has just done. Perhaps even, in the distant future, it could join the European Union, an economic organization many Russians view as more of a threat than NATO.

Bush's goal should be clear: to create a stable and allied Russia within the Western fold. That would be the real happy ending to an updated Blue Motel Room.

For now, though, the lyrics will have to focus on the search for that happy ending and the hopeful signs that one may be in sight.

Louise Branson, co-author of Gorbachev: Heretic in the Kremlin, is a former Moscow correspondent for London's Sunday Times.