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Winter Olympics 2014: Russian ice hockey team edged out under glare of President Vladimir Putin

The United States claim shoot-out victory in a re-run of the Miracle on Ice

As the music to "If you're happy and you know it clap your hands" echoed around the Bolshoy Ice Dome, two skaters traded blows in the middle of the ice, one in the dark blue of the US, one in the white and red of Russia. The crowd clapped enthusiastically but in response to what they could see rather than what they could hear.

Few sporting occasions have the resonance of the US meeting Russia at Olympic ice hockey. Place the fixture on Russian soil, or rather ice, and it adds a whole new layer. Place Vladimir Putin inside the magnificent stadium that is at the centre of his Olympic folly, and it adds something else again for the men in white and red.

This was the hottest ticket of the Games so far and it lived up to its billing. A raucous crowd were finally silenced as the US won 3-2 after a prolonged penalty shoot-out. There was controversy when the American referee disallowed a goal that would have put the hosts 3-2 up with 4:40 remaining.

Having been 2-1 down, it would have capped the evening for Russia. Instead the referee decided the goal net was off its moorings. At the time there was no great protest from the players or the crowd, yet Alexander Ovechkin, Russia's captain, later insisted it should have been given and that would have delivered the president the perfect end to Russia's best day of the Games.

Putin has spent $51bn building this array of glittering arenas (literally in the case of the Bolshoy, the outside of which sparkles with different colours and patterns) in his favourite holiday resort, and in the nearby mountains, where he is reported to have another sizeable home.

Vladimir Putin is unimpressed

Millions more have been spent on the athletes, because as well as the venues Putin wants gold. Right now there are no sportsmen and women under more pressure than the Russians, and from them none more so than the large, muscular and moody men who make up Russia's ice hockey team, the national side the people of this country identify with like no other.

The individual star of the Russian Games was supposed to be Evgeni Plushenko, the much-decorated figure skater who at Putin's request put off retirement to compete here. He helped Russia to their first gold last weekend in the team figure skating, but when he pulled out of the individual event moments before it began on Thursday blaming a bad back, a ton of opprobrium rained down on him. "Treachery" and "invalid" were two insults aimed by senior politicians.

Russia opened their campaign on Thursday with an ultimately comfortable 5-2 win over Slovenia. It was noticeably the first occasion when most locals were glued to the Games. This is Russia's main event. The Soviet Union won Olympic gold eight times. It should have been nine but for the Miracle on Ice in 1980. The influence of that match, the biggest upset in Olympic history, remains at the core of this fixture. Even if most of the players were not even born when it was played out on the ice of Lake Placid, they are well aware of its legend. The Russian coach, Zinetula Bilyaletdinov, played in the game and Ryan Suter, an American defender, was weaned on the tale – his father played.

The result matched the Miracle, although there was nothing unexpected about it, nor how it was reached. These two and the Canadians are closely matched. Both will qualify for the knockout stages.

The Russians started slowly before growing into the game, but Bilyaletdinov denied there had been any sense of stage fright from his players with the stern-faced president staring down from on high.

"There are probably always nerves, but overall we focused on the game," said the coach. "I was in, what I would call, a working ecstasy. I wasn't shaking. As for Vladimir Vladimirovich, I only found out after the game [that he was watching]."

Russia took the lead when Pavel Datsyuk scored the first of his two goals, Cam Fowler and Joe Pavelski put the US ahead before Datsyuk squeezed an equaliser through the goaltender's legs. In the shoot-out TJ Oshie scored the decisive goal after Ilya Kovalchuk hit the post.

The ice hockey will not be settled until the last day of the Games. By then Putin will expect Russia to be in the top three of the medal table. Two of the architects of Canada's Own the Podium programme that proved such a success in Vancouver have been recruited to mastermind Russia's medal push. Vancouver was their worst ever Winter Olympics with only three gold medals brought home. Yesterday they surpassed that tally with a week to go.

First Victor Ahn, lured from Korea by huge financial incentives, won short-track speed skating gold and then Alexander Tretiakov, the Russian Rocket, shot to gold in the skeleton. It was nearly Russia's Super Saturday – if only Kovalchuk had found a true aim on the ice. At least the ice-hockey men will have a second chance, not always a common occurrence in these parts.

"Everything is OK," said Kovalchuk, "nothing terrible has happened."