After a public ceremony in the Kremlin, the two world leaders and their aides met privately.
Sources in the meeting tell CBS News that the Russians complained to Mr. Clinton of walking a tightrope, with world bankers demanding painful reform and the Russian people demanding wages and bread.
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"I do not believe there are any painless solutions," Mr. Clinton said.
The president insisted Russia must develop an effective tax collection system, must not print worthless rubles to pay bills, and must stop steering government bailouts to powerful billionaires.
"I believe someone has to tell the truth to the people so that you're not skeptical when your political leaders tell you things that are hard to hear," Mr. Clinton said.
The hardest thing that Mr. Clinton told Yeltsin was that the U.S. will block additional bailout money pending reform.
There was uncertainty on both sides. Neither man had answers for reporters on economic or political survival. Mr. Clinton hasn't taken a question since his Monica Lewinsky speech.
Yeltsin insisted Russia is committed to democracy. But with a bitter struggle over the government and little reassurance from abroad, the future may just as easily hold communism or chaos.
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