WASHINGTON (AFP) - Russia's granting of asylum to intelligence leaker Edward Snowden marked a sharp setback to already strained US-Russian relations, experts and lawmakers said.

US President Barack Obama's administration once hoped to "reset" relations with the United States' former Cold War foe, but his Russian counterpart Vladimir Putin has remained frosty.

Snowden, a former intelligence contractor, is wanted by Washington for leaking secret details about US surveillance programs and he had been holed up at a Moscow airport for more than a month.

Russia have refused to extradite him, and on Thursday provided the 30-year-old safe haven for a year, allowing him to promptly slip away to a secret location.

"This is not good news," said Steven Pifer of the Brookings Institution, a Washington think tank.

Prominent members of the US Congress slammed Russia's move, seeing it as a blow to relations already strained by the conflict in Syria and the conviction of Russian protest leader Alexei Navalny.

"Edward Snowden is a fugitive who belongs in a United States courtroom, not a free man deserving of asylum in Russia," said Robert Menendez, chairman of the powerful Senate Foreign Relations Committee.

"Regardless of the fact that Russia is granting asylum for one year, this action is a setback to US-Russia relations."

Republican Senator John McCain, meanwhile, issued a sarcastic response on Twitter.

"Snowden stays in the land of transparency and human rights. Time to hit that reset button again #Russia," he wrote.

White House spokesman Jay Carney suggested Mr Obama might even boycott a planned US-Russia presidential summit in early September ahead of a G20 summit in St. Petersburg.

"We're extremely disappointed that the Russian government would take this step despite our very clear and lawful requests in public and in private to have Mr Snowden expelled to the United States to face the charges against him," Carney said.

"We're evaluating the utility of a summit in light of this," Mr Carney told reporters.

"This move by the Russian government undermines a long-standing record of law enforcement cooperation, cooperation that has recently been on the upswing since the Boston Marathon bombings."

Mr Pifer, for one, suggested a moderate response was the best way forward.

"I'm not sure that pushing back really hard is going to help," said Mr Pifer, a former ambassador to Ukraine.

"We don't know what motivated this particular decision by the Russians now, but Putin has shown that he reacts very badly to threats."

While Mr Obama is sure to be criticised if he does make the trip, "the real question is, is Putin prepared to make that summit productive enough so at the end of the day there are results that would justify the political cost that the president's going to pay at home," he added.

State Department spokeswoman Marie Harf said that a meeting of foreign and defense ministers could also be called off.

But she said the two nations have cooperated in areas such as the Afghan war, Iran's contested nuclear program and on reducing nuclear arms arsenals.

Russia and the United Stats have "both been very clear that this is an example of something that we want to treat separately, that we don't want it to adversely affect the whole relationship," she said.

The Russian decision also comes at a time when the Obama administration faces criticism in Congress over the spy programs, with the aftermath of Snowden's leaks providing what is likely the best chance since the attacks of September 11, 2001 to rein them in.

On July 24, the House of Representatives narrowly beat back an effort to cut funding to NSA programs that scoop up telephone data on millions of Americans.

Under mounting pressure from lawmakers, the Obama administration, in the name of transparency, on Wednesday declassified a court order authorizing the collection.

And on Thursday afternoon, Mr Obama met with ten lawmakers from both parties to discuss surveillance, in discussions the White House and lawmakers both called "constructive."

"The President committed that he and his team would continue to work closely with the Congress on these matters in the weeks and months ahead," the White House statement said.

Administration officials are "trying to find a way to protect programs that they still believe are important for national security, and the public revelations has put a spotlight on these programs," Mr Pifer said.

"There are now a lot of questions that they're going to have to answer if they want to sustain congressional support for the programs."