Boris Yeltsin kept up Russia's opposition to Nato's planned enlargement right to the end, but after signing the Act, which paves the way for it, he surprised everyone by announcing he would order the warheads taken off Russian missiles pointed towards Nato states.
His impromptu announcement threw officials into confusion, and the Russian missile command said they had not been told about it and did not know exactly what their President meant. Russia has already signed agreements with the US, Britain and France not to aim missiles at them. President Yeltsin was extending the "de-targeting" arrangement to the other Nato states.
The Founding Act was signed by all 17 heads of government, including British Prime Minister Tony Blair, who met Mr Yeltsin for the first time. The two men discussed organised crime, an area of concern to both. During their discussion, Mr Yeltsin invited Mr Blair to visit Moscow, probably in October.
Both Nato and Russia gave way on strongly held positions to forge the historic Act. Nato has finally agreed to re-examine its "Strategic concept" - which has not been revised since before the break-up of the Soviet Union - to reflect the new landscape of Europe, in which there is no direct threat from the east at the moment. In effect, this could mean the alliance facing a different direction.
The Russians fought hard to get an undertaking that Nato would not deploy any nuclear weapons on the territory of new member states, or foreign conventional forces. Nato insisted it had no plans to put nuclear weapons there, but re- fused to promise never to do so. The final wording of the Act stops short of an absolute pro-mise, but says in the strongest terms that Nato members have "no intention, no plan and no reason to deploy nuclear weapons ... and do not foresee any future need to do so."
It also says the alliance will guarantee the new members' security by plans to reinforce them in emergency, rather than by permanent stationing of troops on their soil.
Nato also gave way a little on its attitude towards the Organisation for Security and Co-operation in Europe (OSCE), which Russia said it would prefer to take a lead in European security issues, rather than Nato. The Act promises Nato's support for peace-keeping operations not only carried out under the UN, but also the OSCE.
Russia has moved on two issues. First, the Act will be "politically" binding but not "legally" binding as the Russians had demanded. However, as the Russian Foreign Minister Yevgeny Primakov pointed out recently, if a treaty is binding, it is binding .
The Russian demand for a veto on Nato decisions has also been rejected. The Act stresses that neither Nato nor Russia has a right of veto over the actions of the other, nor does it restrict independent decision-making and action.
The newly created Nato-Russia Permanent Joint Council will "provide a mechanism for consultations, co-ordination and, to the maximum extent possible, where appropriate, for joint decisions and joint action". The Permanent Joint Council will be the principal means of consultation. Russia will also establish a mission to Nato headed by an ambassador with a senior military adviser.
The document is in four parts: principles; the mechanism for consultation and co-operation, which outlines the structure of the Joint Council; areas for consultation and co-operation; and the military dimension.
President Yeltsin's announce-ment that he would order warheads to be unscrewed from the Strategic Nuclear Forces' missiles caused some confusion, especially as a Russian Strategic Nuclear Forces spokesman said they had no prior knowledge of the announcement. However, Colonel Terry Taylor of the International Institute for Strategic Studies said "de-targeting" agreements had been reached between Russia and the US, France and Britain, and that President Yeltsin was simply saying these would now apply to all Nato countries.