On her recent visit to Moscow, U.S. Secretary of State Condoleezza Rice strongly denied that, as the Bush Administration's top Russia specialist, she had fundamentally misread Russia's President Vladimir Putin.

Responding to an American reporter, Rice said that she had always read President Putin right. "I certainly always read him as somebody who was going to do what he thought was in the best interest of his nation and was going to be, in a sense, transparent about that," Rice said. "Where there have been differences, I think it's because I think we read those interests differently."

Her answer reflects a double frustration, both with the annoyingly simplistic vision of Russia presented in the mainstream U.S. media and reinforced by the administration's critics in Washington (who have engaged in the traditional election year exercise of looking for "who lost Russia") and the equally annoying tendency of President Putin and his team to foist unpleasant surprises on their international partners.

Putin's announcement at the United Russia party congress on Oct. 1 that he might extend his hold on power by becoming prime minister next year put the Bush administration in general, and Rice in particular, in a bind.

For months, Bush administration officials had been making it clear that Putin's decision on his role after 2008 would be a defining moment for Russia, a turning point that would lead either to an evolving democracy based on the rule of law or a lawless autocracy based on the rule of one man.

Both Secretary Rice and even President George W. Bush are on record saying that they certainly expected Vladimir Putin to keep his word and do what he had promised - support a democratic presidential election, hand over power to his elected successor and retire from the scene, at least for a while. It now appears that Putin may keep his promise to leave the office of the presidency, but stay on the scene and continue to rule Russia.

The Bush administration reacted with extreme caution to Putin's announcement, balancing concern over the Kremlin's seemingly autocratic political direction with the need to cooperate with Russia on a host of volatile international issues such as Iran's nuclear program, missile defense and Kosovo.

Washington also realized that its ability to influence Putin's decisions and Russia's internal development is extremely limited. As State Department spokesman Sean McCormack implied, as long as everything is done within the confines of Russian law, it is none of United States' business.

The red line that the Bush administration had foolishly tried to set up for Putin now appears to be slipping in recognition of U.S. dependence on Russia's cooperation on issues of vital importance to U.S. interests.

Rice came under heavy criticism from across the American political spectrum for not forcefully opposing Putin's plans. People on the Republican right, like Richard Perle accused her of misreading Putin and trying to win him over by making nice, which in Perle's view only encouraged the opposite behavior from the Russians. On the Democratic side, people faulted Rice and the Bush administration for still extending hope for Russia's eventual democratic evolution, which in their view is already over.

What the critics seem to be suggesting is the need for the United States to confront more forcefully Putin's autocratic Russia, including embracing an upgraded version of the containment doctrine, which would have serious negative implications for a U.S.-Russia relationship that is still working cooperatively towards resolving a number of important international issues.

Rice, however, took a more cautious path. While studiously avoiding any criticism or even commenting on Putin's future plans, she made clear her dismay over the concentration of power in the Kremlin and Russia's failure to develop strong countervailing institutions to check the unbridled power of the executive.

Her call for such public institutions either inside or outside of the Russian government reflects both a serious concern for the overall political trajectory of Russia and a still-not-abandoned hope that, given time and effort, an open democratic society is very much in Russia's future. On her visit to Moscow and in her comments to the media, Rice has been clear that the Bush administration was still giving President Putin and the Russian political elite the benefit of the doubt, believing that they will steer Russia toward a more pluralistic and open system.

Although Rice did not speculate about this in public, her body language and cautious rhetoric seemed to indicate that the Bush administration did not necessarily have to view Putin's plans to lead Russia's dominant political party and perhaps eventually the Russian government as an inherently undemocratic move.

Were Putin not to initiate any changes in the constitution that would seek to redistribute power from the president to the prime minister, he might create such a strong countervailing institution to the Russian presidency and the concentration of power in the Kremlin - a politically powerful Russian government led by the most popular politician in the country. He would also imbue a new sense of relevance to political parties, which currently have a limited impact on the government's decision making. Were Putin to emulate the Japanese or Swedish models of dominant party rule combined with a pluralistic political succession process based on party factional politics, the United States would be hard pressed not to recognize this as development in a democratic direction.

Rice appears to believe that the jury is still out on whether Russia will become a genuine democracy. She is not misreading this country, and shows appreciation of Russia's internal evolution and the limits of U.S. influence. What she is trying to do is hold her ground and not let the Russia bashers in Washington needlessly wreck a relationship that has been quite productive on some very important issues. She seems to be playing for time, extending hope that in the long run, Putin will do the right thing.

She may still be proven right.