U.S., Russia Remain at Odds Over Seized Compounds

High-level meeting fails to produce accord; Moscow threatens retaliation

WASHINGTON-U.S. and Russian diplomats failed to come to an agreement over the return of Russian Embassy compounds that were seized by the Obama administration in late December as punishment for Moscow's alleged interference in the 2016 presidential campaign.U.S.

Undersecretary of State Thomas Shannon and Russian Deputy Foreign Minister Sergei Ryabkov met in Washington on Monday to discuss the matter and other bilateral issues, but didn't come to a deal.

Russia last year held off from responding in kind after the Obama administration seized the New York and Maryland properties and expelled 35 Russian diplomats accused of operating as spies. The Kremlin bridled its response amid hope that incoming President Donald Trump might reverse the moves, which came in the final weeks of the Obama administration.

Any reversal now looks fraught for the White House, given sentiment in Congress in favor of new sanctions against Russia and a special counsel investigation into whether the Trump campaign colluded with Russia. The Trump administration likely would need to receive something of clear value to the U.S. in exchange for returning the compounds, or risk opprobrium from hawkish U.S. lawmakers from both parties concerned about any moves seen as capitulation to Moscow.

Russia has denied meddling in the election, and Mr. Trump and his representatives have said there was no collaboration.

Russian officials, meanwhile, have been airing increasingly vocal threats since Mr. Trump met Russian President Vladimir Putin at the summit of leaders from Group of 20 leading nations in Hamburg early this month.

"We warned that we have a way to respond, and American interests in the Russian Federation could suffer if our diplomatic property isn't returned without conditions," Mr. Ryabkov said in an interview early Tuesday with the Russian news agency Interfax after his meeting with Mr. Shannon. Mr. Ryabkov said Russia and the U.S. so far hadn't reached a common understanding on the issue but efforts were continuing.

Mr. Ryabkov said Russia fundamentally rejects any attempts by the U.S. to formulate conditions for the return of the diplomatic compounds, which he said were seized illegally. He said such attempts would be doomed to fail and would bring Russia closer to taking reciprocal measures.

Kremlin spokesman Dmitry Peskov said Tuesday that Russia's patience on the issue was running out. "We are counting on prudence from our American colleagues to put the situation back on track in accordance with international law," Mr. Peskov said, according to Interfax.

The State Department released a statement about the talks early Tuesday that made no mention of the controversy over the Russian recreational compounds, sometimes referred to as embassy dachas.

"The conversation was tough, forthright, and deliberate, reflecting both parties' commitment to a resolution," the State Department said. "The United States and Russia seek a long-term solution that would address areas of bilateral concern that have strained the relationship. The talks reflected a spirit of goodwill, but it is clear that more work needs to be done."

State Department spokeswoman Heather Nauert said it would take time to arrive at any agreement. "Nothing is coming together anytime soon," she said.

She declined to respond to threats of Russian retaliation. "It's a hypothetical," she said. "I know that they have threatened a lot of things."

The State Department also said Messrs. Shannon and Ryabkov committed to holding "strategic stability talks" but didn't specify what issues would be discussed in such negotiations. The talks could include traditional topics of nuclear disarmament and missile defense, or could also more broadly address cyberweapons and questions over Russia's alleged violation of the Intermediate Nuclear Forces Treaty, a Cold War era pact limiting medium-range missiles. Russia, in turn, has accused the U.S. of violating the pact.

Steven Pifer, a senior fellow at the Brookings Institution and former deputy assistant secretary of state with responsibility for Russia and Ukraine, said such talks could be valuable and should have a broad mandate.

Mr. Pifer also said the Trump administration shouldn't return the diplomatic compounds unless the U.S. receives something concrete in return, because the history of horse-trading between Washington and Moscow dating to the Soviet era shows that one-sided concessions yield few results.

"Giving the compounds back without getting something would be a mistake," Mr. Pifer said.

The U.S. has complained about Russia's efforts to hamper construction of a new U.S. consulate in St. Petersburg, and Mr. Pifer said one possibility would be to exchange the U.S. compounds for Russian permission to move forward with that project.

-Felicia Schwartz contributed to this article.

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