UPDATE 1-Obama to set nuclear arms cut goal in Berlin speech
* Obama makes first trip to Berlin as U.S. president
* Tensions over cyber spying, hope for a new trade agreement
* Popular in Germany, but protests expected
(Recasts with nuclear arms initiative)
BERLIN, June 19 (Reuters) - President Barack Obama will unveil plans for a sharp reduction in nuclear warheads in a landmark speech at the Brandenburg Gate on Wednesday that comes 50 years after John F. Kennedy declared "Ich bin ein Berliner" in a defiant Cold War address.
A senior U.S. administration official said Obama, on his first visit to the German capital as president, would signal his desire to cut deployed atomic weapons by up to one third below the level achieved in the last "New START" treaty with Russia.
"The U.S. intent is to seek negotiated cuts with Russia so that we can continue to move beyond Cold War nuclear postures," the official said.
Fresh from a two day summit with Group of Eight leaders in Northern Ireland, Obama is due to speak at the Gate that once stood alongside slabs of the Berlin Wall that divided the communist East and capitalist West sections of the city.
It has been nearly five years since he last came to Berlin as a presidential candidate, attracting a crowd of 200,000 adoring fans at a speech in the Tiergarten park.
A lot has changed since then. After more than four years in office, Obama has disappointed some Europeans who saw him as a more progressive face of America compared to his predecessor, Republican George W. Bush.
But the Democrat leader remains popular in Germany, and he has forged a pragmatic - if not warm - relationship with conservative Chancellor Angela Merkel, one of his closest European allies. Obama's trip gives her a boost just months before a German election.
The president will spend his day in meetings with Merkel, German President Joachim Gauck, and Peer Steinbrueck, the Social Democrat running against her this fall. Obama and Merkel are scheduled to give a press conference around midday, followed by the speech three hours later.
In 1987 Ronald Reagan, speaking on the other side of the Gate in what was then West Berlin, exhorted Soviet leader Mikhail Gorbachev to "tear down this wall!". Kennedy delivered his celebrated "Ich bin ein Berliner" remarks 50 years ago at Schoeneberg city hall a few kilometres to the south.
Merkel forbade Obama, then an Illinois senator, from speaking in front of the famous landmark in 2008, arguing that this privilege was reserved for sitting presidents.
21ST CENTURY CHALLENGES
This year, to a crowd of some 4,000 government officials and students, he will stand in the Pariser Platz square on the east side of the Gate and call for Germans, Europeans and Americans to use their shared history of strong alliances to tackle pressing problems of the 21st century.
Those challenges included nuclear arms control, climate change, counterterrorism, and promoting democratic values beyond the Western world, Obama's deputy national security adviser Ben Rhodes told reporters aboard Air Force One on the flight to Berlin Tuesday evening.
"This is the place where U.S. presidents have gone to talk about the role of the free world," Rhodes said.
Separately, the senior official said on Wednesday that Obama would pledge to work with NATO allies to develop proposals on reducing U.S. and Russian tactical nuclear weapons in Europe.
He is also expected to announce that he will host a nuclear security summit in 2016 to work on the issue of securing nuclear materials and preventing nuclear terrorism.
Obama met with Russian President Vladimir Putin at the G8 summit, signing a new agreement on nuclear nonproliferation to replace a 1992 pact that expired on Monday.
The talks between Obama and Merkel are expected to focus on the wars in Syria and Afghanistan, negotiations over a new EU-U.S. trade pact, and revelations of a U.S. spying program dubbed Prism that has upset Germans wary of government surveillance after the trauma of the Nazi Gestapo and East German Stasi secret police.
"I expect the chancellor to raise this issue and seek answers," Ruprecht Polenz, a member of Merkel's conservatives and chairman of the foreign affairs committee of the Bundestag lower house, said of the Internet monitoring program.
Ahead of the visit, Merkel tried to play down tensions over the programme, saying Washington's cyber-snooping had helped prevent attacks on German soil.
Obama, who is joined by his wife Michelle and their two daughters, landed in Berlin on Tuesday evening to a red carpet and honour guard welcome. As his motorcade swept through the city's wide streets, Germans lined up to watch and wave. One carried a huge American flag.
Not everyone was happy to see the U.S. leader, though. Media reports said anti-Obama protests could draw up to 5,000 people on Wednesday. The Pirates party, which campaigns for Internet freedom, has called for a rally at the Victory Column, where Obama spoke in 2008.
(Writing by Noah Barkin and Jeff Mason; Additional reporting by Erik Kirschbaum; editing by Anna Willard)