REYKJAVIK, Iceland (AP) — Top diplomats from the United States and Russia sparred politely in Iceland during their first face-to-face encounter, which came as ties between the nations have deteriorated sharply in recent months.

U.S. Secretary of State Antony Blinken and Russia’s longtime Foreign Minister Sergey Lavrov spoke frankly but calmly of their differences as they held talks on the sidelines of an Arctic Council meeting Wednesday in the Icelandic capital of Reykjavik, a city with deep history in U.S.-Russian relations.

“We seek a predictable, stable relationship with Russia," Blinken told Lavrov, echoing comments made by President Joe Biden, who has proposed a summit with Russian leader Vladimir Putin next month. “We think that’s good for our people, good for Russian people and indeed good for the world.”

“It’s also no secret that we have our differences and when it comes to those differences, as President Biden has also shared with President Putin, if Russia acts aggressively against us, our partners, and our allies, we’ll respond — and President Biden has demonstrated that in both word and deed, not for purposes of escalation, not to seek out conflict, but to defend our interests," Blinken said.

The meeting took place just as the Biden administration notified Congress of new sanctions on Russia over a controversial European pipeline. The administration hit eight Russian companies and vessels with penalties for their involvement in the Nord Stream 2 pipeline, while sparing two German entities from similar penalties, which would have a more significant effect on the project.

“We have serious differences in the assessment of the international situation, we have serious differences in the approaches to the tasks which have to be solved for its normalization,” Lavrov said. "Our position is very simple: We are ready to discuss all the issues without exception, but under perception that the discussion will be honest, with the facts on the table, and of course on the basis of mutual respect.”

Even before Wednesday's talks the two diplomats had laid down near diametrically opposed positions for the meeting, previewing what was likely to be a difficult and contentious exchange over myriad issues including Ukraine, the Arctic, Russia’s treatment of opposition figure Alexey Navalny and accusations of cyber malfeasance, including claims that Russia-based hackers were responsible for a ransomware attack on a key U.S. pipeline.

The meeting also followed a spate of tit-for-tat diplomatic expulsions as U.S.-Russian relations threaten a return to Cold War lows.

After the meeting, which ran for a longer-than-expected hour and 45 minutes, the State Department said Blinken had called for Russia to release two Americans it holds, Paul Whelan and Trevor Reed. He also raised “deep concerns” about Russia’s military buildup on the Ukraine border and its actions against the Voice of America and Radio Free Europe/Radio Liberty, the department said.

Lavrov, meanwhile, told Russian reporters after the meeting that the talks had been “constructive” and that Russia has proposed starting a new and broad strategic dialogue. “There is a lot of rubble, it’s not easy to rake it up, but I felt that Antony Blinken and his team were determined to do this. It will not be a matter for us,” he said, according to the news agency Tass.

Neither side offered any update on progress toward a Biden-Putin summit, saying only that discussions about its logistics continue.

Blinken noted that despite the vitriol, the U.S. and Russia had agreed early in the Biden administration to a five-year extension of a key arms control pact that President Donald Trump had declined to renew before he left office. Trump left a decidedly mixed legacy on Russia that included a friendly personal relationship with Putin, while his administration still imposed sanctions and other punitive measures.

Another, more immediate area of disagreement in Reykjavik, the site of the famous 1986 summit between President Ronald Reagan and Russian leader Mikhail Gorbachev, is the Arctic, where Russia has been expanding its military presence and pursuing policies to expand its influence, to the alarm of the Americans.

Blinken noted that the U.S. and Russia have cooperated in the past on Arctic issues, although he glossed over deep American opposition to Russia’s increased military activity in the area and its proposal to renew a long-suspended military dialogue within the eight-nation Arctic Council.

Blinken rejected Russian calls to resume a military component of the Arctic Council and expressed concerns about Russia’s increasing military activity in the region known as the “high North.” On Wednesday, in successive meetings with foreign ministers from other Nordic Council members, Blinken repeatedly referred to the importance of “continuing to maintain this region as one of peaceful cooperation.”

“We have concerns about some of the recent military activities in the Arctic,” he said. “That Increases the dangers of accidents and miscalculations and undermines the shared goal of a peaceful and sustainable future for the region.”

Blinken also took Russia to task for proposing new navigational regulations for the region and decried Lavrov for comments in which he dismissed such criticism because the Arctic “is our territory, our land.”

“We have to proceed all of us, including Russia, based on the rules, based on norms, based on the commitments that we’ve each made and also avoid statements that undercut those,” Blinken said.

Moscow and Washington are also in a bitter dispute over the status of their respective embassies and consulates after the diplomatic expulsions. Russia has given the U.S. until Aug. 1 to get rid of all non-American staff at its diplomatic missions, something the U.S. says will make it nearly impossible for its facilities to function.

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Associated Press writers Vladimir Isachenkov and Jim Heintz in Moscow contributed to this report.