Russia is becoming increasingly authoritarian at home and aggressive abroad, US Secretary of State Condoleezza Rice has said.
In a strongly-worded speech, Ms Rice said Moscow was on a "one-way path to isolation and irrelevance".
Diplomatic relations between the US and Russia have been strained by the recent conflict in Georgia.
Earlier, Russia's president said the two nations should not risk established ties over "trivial matters."
Dmitry Medvedev said it would be "politically short-sighted" if Washington and Moscow were to endanger their political and economic ties.
However, Ms Rice suggested in her speech that following the conflict in Georgia, Russia's bid to join the World Trade Organisation had been put in doubt.
Russia's leaders violated Georgia's sovereignty and territorial integrity and launched a full-scale invasion
The US has already shelved a civilian nuclear deal with Russia, but despite tensions the two countries are maintaining diplomatic links.
Ms Rice held a telephone conversation with Russian Foreign Minister Sergei Lavrov just hours before delivering her speech, says the BBC's Kim Ghattas in Washington, and Russia is also due to join an international meeting on Iran's nuclear programme on Friday.
Our correspondent says Moscow is also telling the US that its co-operation is needed over issues like Iran and North Korea, with many in Washington feeling the Russians have a point.
Several hours after Ms Rice spoke, it emerged that a Russian submarine test-fired an intercontinental ballistic missile capable of carrying nuclear warheads.
An official from Russia's defence ministry is quoted as saying that the test - carried out in Russia's far-eastern Kamchatka peninsula - went according to plan.
Speaking at an event organised by the German Marshall Fund in Washington, Ms Rice acknowledged that Georgia had fired the first shots in the breakaway region of South Ossetia.
Ms Rice said Russia had tried to dismember Georgia
"The Georgian government launched a major military operation into Tskhinvali [the capital of South Ossetia] and other areas of that separatist region," she said.
"Regrettably, several Russian peacekeepers were killed in the fighting," she added.
But Ms Rice said that Russia had escalated the conflict.
"Russia's leaders violated Georgia's sovereignty and territorial integrity and launched a full-scale invasion across an internationally recognised border," she said, adding that Russia had also violated the terms of a ceasefire negotiated by French President Nicolas Sarkozy.
Ms Rice said it had been "deeply disconcerting" that Russia had tried to "dismember" Georgia by recognising Abkhazia and South Ossetia, and argued that Russia's actions were part of what she described as a "worsening pattern of behaviour".
"I refer... to Russia's intimidation of its sovereign neighbours, its use of oil and gas as a political weapon... its threat to target peaceful neighbours with nuclear weapons... and its persecution - or worse - of Russian journalists and dissidents," she added.
Pledging help to rebuild Georgia, Ms Rice said the US and Europe would not let Russia benefit from aggression.
'Taking the bait'
Ms Rice admitted that Georgia could have responded better to the events last month in South Ossetia.
We will not allow Russia to wield a veto over the future of our Euro-Atlantic community
"We warned our Georgian friends that Russia was baiting them, and that taking this bait would only play into Moscow's hands," she said.
However Ms Rice, an expert on the Soviet Union, also said that Russia could not blame its behaviour on the enlargement of Nato.
"Since the end of the Cold War, we and our allies have worked to transform Nato... into a means for nurturing the growth of a Europe whole, free and at peace."
The promise of Nato membership had been a positive incentive for states to build democratic institutions and reform their economies, she added.
And she insisted that Russia would not be allowed to dictate who joined the Nato alliance.
"We will not allow Russia to wield a veto over the future of our Euro-Atlantic community - neither what states we offer membership, nor the choice of those states to accept it," she said
"We have made this particularly clear to our friends in Ukraine."
The secretary of state was also critical of the domestic situation inside Russia.
"What has become clear is that the legitimate goal of rebuilding Russia has taken a dark turn - with the rollback of personal freedoms, the arbitrary enforcement of the law [and] the pervasive corruption at various levels of Russian society," she said.
Russia's leaders were risking the future progress of the Russian people, she said, declaring that Russia's leaders "are putting Russia on a one-way path to self-imposed isolation and international irrelevance".
This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.