Russia in defence warning to US

Mr Putin made the threat during his annual address to parliament - which he said would be his last as president.

He also hit out at an influx of foreign money which he said was being used to meddle in Russia's internal affairs.

US Secretary of State Condoleezza Rice dismissed Russian concerns over the missile shield as "ludicrous".

BBC diplomatic correspondent Jonathan Marcus says Mr Putin's speech marks a significant raising of diplomatic stakes.

The Russian president suggested that his country should freeze its compliance with the 1990 Conventional Forces in Europe (CFE) treaty - which limits military deployments across the continent - until all Nato countries had ratified it.

"Our partners... are using the present situation to boost the presence of military bases and systems close to our borders"
Vladimir Putin

Putin's upbeat address

Excerpts: Putin's address

Collateral of chilled ties

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The treaty was adapted in 1999 after the collapse of the Warsaw Pact, but Nato states have not yet ratified the new version, linking it to the withdrawal of Russian forces from Georgia and Moldova.

Mr Putin accused Nato states of exploiting the situation to increase their military presence near Russia.

He said that the Russian moratorium would continue "until all countries of the world have ratified and started to strictly implement it".

If there was no progress at upcoming talks between Nato and Russia, Russia would "look at the possibility of ceasing our commitments under the CFE treaty", he said.

The US wants to station 10 interceptor missiles in Poland, with radar operations in the Czech Republic - which Russia strongly opposes.

"The Russians have thousands of warheads. The idea that you can somehow stop the Russian strategic nuclear deterrent with a few interceptors just doesn't make sense," said the US secretary of state in Oslo, ahead of the Nato-Russia meeting.

Nato Secretary-General Jaap de Hoop Scheffer said that he would seek a further explanation of Russia's position at the talks.

'Meddlers'

Mr Putin also hit out at those who he said were using democracy as a pretext to interfere in politics.

"There is a growing influx of foreign cash used to directly meddle in our domestic affairs," Mr Putin said.

"Not everyone likes the stable, gradual rise of our country," he said. "There are some who are using the democratic ideology to interfere in our internal affairs."

He did not specify those responsible, but in the past Russian authorities have accused the West of funding groups that oppose the government.

He also called for a moment of silence in memory of former President Boris Yeltsin, whom he said had laid the foundations for a changed Russia. He called for a library to be established in Mr Yeltsin's name.

Other highlights included:

• praise for Russia's economy, which he said was now one of the 10 largest in the world
• a funding boost for state housing, using some of the proceeds from the auction of bankrupt oil giant Yukos

Mr Putin's speech was delayed by a day because of Mr Yeltsin's state funeral.

He reiterated his pledge to step down in March 2008, after serving two terms as president.

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