Bush Hails Progress on Baltic Republics : Diplomacy: The White House welcomes reports that the Kremlin has agreed to relax its embargo on Lithuania.

President Bush on Wednesday hailed meetings between Soviet President Mikhail S. Gorbachev and leaders of Lithuania, Latvia and Estonia as “good news” and a potential “first step” toward resolving the four-month conflict over independence for the Baltic republics.

“I hope that what we saw yesterday is a first step in a dialogue that will lead to the self-determination that we strongly support,” Bush said in a Washington press conference with representatives of regional newspapers.

Administration officials also were cheered by reports Wednesday that the Kremlin has agreed to relax its economic embargo on Lithuania that it had imposed earlier this spring.

“We welcome this announcement,” White House spokesman Marlin Fitzwater said in a statement. “These are positive steps.”

For the Administration, the meetings and the lifting of the embargo vindicate a gamble that Bush took at his summit meeting with Gorbachev earlier this month. In response to repeated requests from Gorbachev, Bush agreed to sign a trade agreement with the Soviets, prompting complaints by conservatives and some congressional Democrats that he had “sold out” the Lithuanians.

But, during the summit meetings and subsequently, Administration aides had insisted that Bush made clear to Gorbachev that the trade treaty could not be implemented while the Baltic crisis continues. The decision to sign the treaty, they said, came only after Gorbachev gave Bush enough of a response to indicate he understands the U.S. position and that steps would be taken to ease tensions between Moscow and the three independence-minded republics.

Officials said they had not received any specific advance word from the Soviets about the decision to ease the embargo on Lithuania, which was announced in Moscow by Tass, the Soviet news agency, quoting Lithuanian Prime Minister Kazimiera Prunskiene. But they made no attempt to hide their satisfaction with the way events have developed.

“I was very, very pleased to see this occur in the wake of our, of what I think was a successful summit meeting,” Bush said in his press conference, referring to Tuesday’s meeting between Gorbachev and the three Baltic presidents and the reports of progress that came from it.

Initial congressional response echoed Bush’s statements.

“This is a very welcome move and would certainly make it much more likely” that Congress would go along with improved trade ties with the Soviets, said Sen. Alan Cranston (D-Calif.).

If the easing of tensions in the Baltics continues, the way could be cleared for implementation of the trade agreement and the granting of most-favored-nation trade status to the Soviets. Before that can be done, however, the Soviets must satisfy U.S. law by taking one additional step, passing a law that would end restrictions on Jews and others who wish to emigrate.

Over the last six months, Soviet officials several times have said that passage of the law was imminent but each time it has been delayed. Administration officials now say they have no idea when the legislation might be enacted.

The confrontation between Moscow and the three Baltic republics has complicated U.S.-Soviet relations since March, when Lithuania declared its independence. Since then, both Estonia and Latvia have voted to secede, although both opted for a more gradual path than Lithuania’s.

Bush has offered rhetorical support for the Baltic independence movements, emphasizing that the United States never has accepted the 1940 Soviet takeover of the three republics.

Times staff writer Maura Reynolds contributed to this story.