Nato is to get a radical overhaul of its military operation.
Nato meeting first since Iraq war
Defence ministers meeting in Brussels for the first time since the American-led war in Iraq agreed to the changes.
They include cutting regional headquarters by almost half.
The main military headquarters will remain at Mons in Belgium while the parallel command in the United States, in Virginia, will take on a new role.
The changes will enable Nato to adapt to deploying lighter, more flexible forces to face security threats from across the world.
The plans were promoted by the American defence secretary, Donald Rumsfeld, who was at the meeting and who appealed to members to learn the lessons of the Iraq war.
Divisions over the role of Nato
The war caused deep rifts within the alliance, with several countries opposed to it.
While debate continues about the role of Nato, the secretary general, Lord Robertson, set out a list of its responsibilities.
These included Balkan peacekeeping, counter-terrorism and eventual command of the international stabilisation force in the Afghan capital, Kabul.
HQ funding stopped
The cutbacks in regional bases were opposed by Spain and Greece.
Both countries stand to lose military prestige and civilian jobs when the bases are closed.
The alliance will grow from 19 to 26 members next year when former Communist bloc countries join.
Meanwhile, in a separate development, the United States announced it would be blocking further spending on the new Nato headquarters in Brussels because Belgian law allows foreigners to be tried for human rights crimes.
"It would obviously not be easy for US officials...to come
to Belgium for meetings," US Defense Secretary Donald Rumsfeld
"Therefore our position is that it would not make much
sense to build a new headquarters if they can't come here for
Rumsfeld did not say whether, eventually, the US would like to see Nato headquarters moved away from Belgium, but he added that it would be "perfectly possible" for the alliance to meet elsewhere.