Russia's awarding of asylum to U.S. leaker Edward Snowden dealt a new blow to already bruised relations between Moscow and Washington but it remains in their interest to prevent the row from erupting into a Cold-War style crisis, analysts said.

Washington immediately rebuked Moscow for granting one year asylum to a man the United States wants to put on trial for leaking details of a vast U.S. intelligence program.

The White House said it was "extremely disappointed" and, perhaps more significantly, said the decision had called into question the need for a planned bilateral summit between Vladimir Putin and Barack Obama in September.

The dispute could barely come at a worse time in Russia-U.S. relations with Washington deeply critical of rights violations under Putin's rule and the two sides at odds over the conflict in Syria.

Yet in over two decades since the collapse of the Soviet Union, Russia and the United States already have a chequered history of cyclical ups and downs in relations and the blow of the Snowden row may not be terminal, analysts said.

"A cancellation of the meeting between Obama and Putin would be evidence of a serious complication in relations," said Maria Lipman of the Carnegie Centre in Moscow.

"But it would be wrong to say that relations are collapsing," she added, noting that one of Obama's priorities remained agreeing more arms cuts with Russia.

"There is a risk that Obama could lose interest in relations with Russia but even in this case it is not fatal," she told AFP.

Putin has tried to distance himself from the entire Snowden affair, declaring on July 17 that "relations between states are much more important than squabbles surrounding the work of security services."

Minutes after the asylum decision was made public on Thursday, Putin's foreign policy advisor Yury Ushakov rushed to describe the Snowden issue as "rather insignificant" and arguing it should not affect relations.

The Kremlin had repeatedly argued that it did not invite Snowden to come to Russia and his arrival on June 23 at Moscow's Sheremetyevo airport from Hong Kong was completely unexpected.

"Russia did not need the Snowden problem but it happened," said Valery Garbuzov of the US-Canada Institute in Moscow.

"The Russian leadership had to react -- it would have been inhumane to hand him over but giving asylum also complicates relations," he said.

In a strong sign that contacts have not been ruptured, US ambassador to Moscow Michael McFaul met Ushakov Friday for talks on issues including the "new status" of Snowden as well as Syria and missile defense, the American embassy said.

Obama is due to visit Russia in any case in early September to attend the G20 summit in Saint Petersburg.

But he had been expected to come to Moscow for a separate one-on-one meeting with Putin which would be the first bilateral summit between the two men since the Russian strongman returned to the Kremlin for a third term in May 2012.

Until now, they have only held brief meetings on the sidelines of international summits.

Fyodor Lukyanov, editor of the journal Russia in Global Affairs, said it was still possible that Obama could undertake the Moscow visit although he would risk domestic criticism.

"Putin has tried to distance himself from the Snowden affair and has always emphasized that Russia is a victim of circumstances," he said.

He said that any "retaliation from the United States will only have symbolic character".

Republican U.S. Senator John McCain had said after the granting of asylum to Snowden that it was time to "fundamentally rethink our relationship" and take tough action against Moscow.

But Lipman said that Putin's statements on the Snowden affair had shown that the Kremlin chief still had an interest in preserving relations with Russia.

"Other solutions were sought, including sending him to another country.

Putin did not strive for Snowden to come to Russia," she added. (AFP)