If Vladimir Putin is to be believed, the G8 summit that opens today at Helingendamm in Germany will look like a diplomatic version of the duel at OK Corral.

Forty-eight hours before attending the summit, Putin came out with his most aggressive statements ever against the United States, and the West in general, and even threatened to target European Union nations with new improved Russian missiles.

Are we heading for a new Cold War?

The answer must be no. History does not repeat itself, except as a caricature. The idea that Russia might attack Berlin, Paris and London with missiles is simply not in the cards. Putin's new resurgent Russia earns almost 70 per cent of its foreign revenue from oil and gas exports to the EU. Also, one does not need much of an imagination to see that inside Russia itself there is little support for a policy that could lead to war, hot or cold.

So, what is happening here?

The stated immediate cause of Putin's pique is a Nato plan to install an anti-missile shield in some member countries in Europe. The so-called shield is designed to defend Nato members against missile attacks. So, as long as Russia has no plans to launch missiles against Nato members, there is no reason why it should be concerned about the plan.

In any case, Russia has a special partnership agreement with Nato that entitles it to take part in developing the anti-missile shield and having it installed in its own territory as well.

Nato claims that the anti-missile shield is aimed against "rogue regimes" such as North Korea and Iran or terrorist groups operating from the Middle East. Whether this is the case or not, one thing is certain: the proposed shield is designed to stop attacks, not to initiate them.

Putin's real or feigned ire may have other causes.

A good part of Putin's real or feigned belligerence is prompted by domestic politics. Under the constitution, Putin cannot seek a third presidential term. However, what if he can engineer a constitutional amendment by pretending that Russia is in some danger that requires a "firm hand", i.e. his own's, to deal with?

Creating a foreign policy diversion has yet another advantage. It might shift the focus away from what looks like a definite authoritarian drift in the Kremlin. It could also drown calls for an end to political assassinations and the campaign to crush the independent media.

Putin's tougher rhetoric may also have a foreign policy dimension. This week's G8 summit will be the first in which a Russian leader finds himself without a single ally. Gone are the days when Putin could gang up with Germany's Gerhard Schroeder, who is now hired by a state-controlled Russian energy company, and France's Jacques Chirac who believed that foreign policy consisted of thumbing one's nose to Washington.

Germany's new leader Chancellor Angela Merkel and France's new president Nicolas Sarkozy are determined to strengthen the unity of the Western democracies in the face of new menaces in an increasingly dangerous world.

Putin may also have acted in accordance with the dictum that attack is the best defence. Of all the G8 members, Russia is the one with the highest and fastest rate of increase in military expenditure. One way to justify such a rapid military build up is to persuade everyone that Russia is threatened by the United States.

Nuclear arsenal

Because Russia already has an impressive nuclear arsenal, inherited from the former Soviet Union, Putin's projected military build-up is likely to cause concern not only in Europe but also in China and Japan. Putin's new aggressive-defensive posture is also meant to justify the policy of "proximity pressure" that Russia has been using against several of its "naughty" neighbours including Georgia, the Ukraine and the three Baltic republics.

Finally, Putin may be trying to divert attention from Russia's return as the largest exporter of military hardware across the globe, including to such adventurist powers as Iran, Syria and Venezuela.

Iran may have yet another part in shaping Putin's new aggressive-defensive strategy. Putin understands the danger of a Khomeinist regime armed with nuclear weapons for all of Iran's neighbours, including Russia. At the same time, however, he does not wish to see a regime change in Tehran that would lead to a return of Iran to the Western camp. This is why, Russia has endorsed a set of United Nations' sanctions against the Islamic Republic while becoming Tehran's principal supplier of military hardware and technology.

It is clear that US President George W. Bush, now supported by all members of the G8 except Russia, would be seeking a joint and tougher new strategy towards Iran. And it is equally clear that Putin will do all he can to prevent the formulation of such a policy within the framework of the G8.

The question is: how to deal with Russia under Putin?

One answer is to ignore it. Despite the fact that Russia has restored a good part of its economic and military potential it is still not in a position to threaten the international balance of power in a significant way. To ignore Russia, however, would be bad policy. The next decade or so could be crucial in the way Russia shapes its future as a modern democracy. To shut it out, to ignore it, would simply strengthen the hands of obscurantist forces that dream of empire in either of its two versions: Tsarist or Communist.

Russia, even under a tough customer such as Putin, must be engaged based on a clear and principled policy of helping it achieve its transition from a totalitarian system to a democratic one. A difficult task, but one that President Bush, appears prepared to tackle when he hosts Putin during the summer holidays in Massachusetts.

Iranian author Amir Taheri is based in Europe.