DONGUZ TESTING RANGE, Russia (Reuters) - Russia has said it would build a space defense system and a new fleet of nuclear submarines by 2020, beefing up its nuclear deterrent at a time of heightened tensions with the United States.
Announcing the biggest defense initiative in Russia for at least a decade, President Dmitry Medvedev said this summer's war with Georgia -- which opened up new rifts between Moscow and the West -- showed the need for Russia to have a strong military.
The plan for a stronger deterrent also comes against the backdrop of fierce Russian opposition to the United States' plans for a missile-defense shield in eastern Europe, a project the Kremlin says is a threat to its national security.
"A guaranteed nuclear deterrent system for various military and political circumstances must be provided by 2020," Medvedev said after viewing a military exercise in the southern Urals.
"Large-scale construction of new types of warships is planned, primarily of nuclear submarines armed with cruise missiles, and multi-purpose submarines. A system of air and space defense will be created," Medvedev said.
Medvedev was speaking at what one military commander said were Russia's largest combined-arms live-fire exercises in 20 years.
Venezuelan President Hugo Chavez, an ardent foe of Washington who has aligned himself with Moscow, met Medvedev
75 kilometers from the site of the exercises earlier on September 26.
"Just recently we have had to rebuff an aggression unleashed by the Georgian regime and, as we found, a war can flare up suddenly and can be absolutely real," Medvedev said.
Russia launched a massive counterattack to crush an attempt by Georgian forces to retake the separatist region of South Ossetia. Moscow said it had to act to prevent a genocide, but Western states said its response was disproportionate.
The conflict over Georgia worsened tensions with the United States that had been building since Vladimir Putin, a former KGB spy and Medvedev's predecessor, came to power in 2000 and began re-asserting Russia's status as a world power.
In the past month Russia has sent two TU-160 nuclear-capable bombers on a mission to Venezuela and a naval flotilla is on its way to the Latin American country for joint exercises in November, the first such maneuvers since the Cold War.
Russia's military endured years of under-funding following the collapse of the Soviet Union, with its warships and aircraft sitting idle for long periods because of a lack of cash for fuel and spare parts.
Analysts say the nuclear deterrent did not suffer the same neglect and remains effective, making Russia dependent on its nuclear forces to compensate for the shortcomings in its conventional capabilities.
The Kremlin, now sitting on a large cash pile after several years of high prices for its main exports, oil and gas, has already injected large sums into reviving the military.
Putin, who is now a powerful Russian prime minister, announced earlier this month that nearly $95 billion will be allocated to defense and security in 2009.
That is a 27 percent increase on the previous year, but still a fraction of total U.S. defense spending, which this year was more than $600 billion.
Russia has already been spending heavily on enhancing its nuclear deterrent. The Topol-M, a new land-based mobile nuclear rocket, has entered service and the Bulava submarine-launched missile is in development.