President Bush said Monday the United States was granting diplomatic relations to the Baltic states of Lithuania, Latvia and Estonia, formally recognizing the independence of states that were annexed by the Soviet Union in a 1940 agreement with Adolf Hitler.

Bush made the announcement after waiting in vain for Soviet lawmakers to do the same. Bush's Labor Day news conference came on the final day of his summer vacation.More than 30 nations have recognized the Baltics since last month's failed coup in the Soviet Union. Bush said this was a "watershed" period and noted that the United States had "always supported independence of the Baltic states."

Bush said he had spoken to the presidents of the Baltic states and told them independence would be recognized Monday.

He said he was sending officials from the U.S. Department of Agriculture to the Baltic nations to assess what medical and food assistance should be extended during the difficult economic months to come.

The United States and other Western nations never recognized the forcible incorporation of the Baltics into the Soviet empire. Bush, like eight presidents before him, signed annual Captive Nation proclamations demanding their freedom.

Bush said he felt that Soviet President Mikhail Gorbachev had made a "good statement" over the weekend in acknowledging the right of Soviet republics to choose their own form of government. Gorbachev was working with officials from 10 republics to re-form the Soviet system to grant more authority to the republics and less to the Kremlin (story below).

Bush was asked if he planned to recognize indepedence for any other republics - Moldavia and Georgia are pressing the hardest.

"We've got to know first what kind of relationships these republics want to have with the center," he said, adding that it has always been clear that the Baltic states were different.

Though Monday's announcement on the Baltics was inevitable, it was seen as an important step by Baltic officials. Bush said that there will be separate U.S. diplomatic missions to each of the states.

Lithuania, Latvia and Estonia are republics that Josef Stalin's Soviet Union annexed in 1940 after cutting a deal with Nazi Germany.

But Bush responded cautiously when Lithuania made its first move last year to bolt from the Kremlin's rule, and more recently as the failed coup against Gorbachev widened the cracks in the splintering union.

Asked if the Soviet Union needed a central government at all, Bush said, "I think there's got to be some government with which the United States works on many questions," such as nuclear defense and Middle East diplomacy.

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Meanwhile, Sen. Sam Nunn, D-Ga., met Gorbachev in Moscow Monday to discuss how the United States can help the Soviets convert defense industries and "demilitarize their society."

Nunn, Senate Armed Services Committee chairman, said the new Soviet defense minister, Yevgeny Shaposhnikov, assured him "they were going to maintain central control of nuclear weapons."

Nunn said he urged Shaposhnikov to take control of short-range tactical nuclear weapons in the republics and return all of them to Russia.

"I think the odds are overwhelmingly against anything happening," said Nunn, "but you want to make the odds insurmountable when you have the stakes that we have in nuclear weapons."

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