Russia insisted today that there was no prospect of a war with the United States as the Kremlin ordered a sharp increase in defence spending, according to Times Online.

Deputy Foreign Minister Alexander Yakovenko ruled out military conflict with Russia`s former Cold War adversary. He also called on the European Union, rather than Nato, to act as guarantors of Georgia`s security.

“Regarding the possibility of war between the United States and Russia, this possibility is ruled out,” Mr Yakovenko told reporters in Moscow.

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His remarks came as President Dmitri Medvedev called for a full-scale overhaul of the international security system, saying that the crisis over Georgia had exposed the failings of the present arrangement.

"It is absolutely apparent today even to those who don`t say it aloud that the existing security system has been broken and unfortunately proved to be bankrupt," Mr Medvedev told leaders from civil organisations at a meeting in the Kremlin.

Mr Medvedev proposed a new pan-European security treaty shortly after he became President in May, but it received only lukewarm support among Nato members. He taunted Nato over its failings today and said that the Georgia crisis showed the need for his idea.

"The likelihood that a major European treaty will be signed after the events in the Caucasus is increasingly growing. That is now clear even to those who were telling me that there was no need for that and Nato will secure everything," Mr Medvedev said.

"What has Nato decided? What has it secured? It only provoked a conflict, nothing else."

Mr Medvedev spoke as the Duma, Russia`s lower house of parliament, passed a 25-per cent increase in defence spending next year from $40 billion to $50 billion.

Russia`s three-year budget forecast includes further increases to $54.5 billion in 2010 and to $58 billion by 2011. However, Russia`s military budget remains barely a tenth of the $480 billion spent by the Pentagon this year.

"We will be consistently strengthening our national security, modernising the army and enhancing the defence capability to a sufficient level," Mr Medvedev said.

He told defence chiefs last week that the Georgian war showed that Russia had to modernise its military as "one of our top priorities". Booming oil revenues allowed his predecessor Vladimir Putin to quadruple defence spending, with $189 billion earmarked to upgrade army and navy equipment by 2015.

Mr Medvedev said that Russia would seek to "restore normal human relations" with the people of Georgia after last month`s war despite what he called the propaganda of the "Georgian regime" of President Mikheil Saakashvili.

Russia criticised the US for failing to grant visas to representatives of Georgia`s breakaway regions of Abkhazia and South Ossetia, which Moscow has recognised as independent states. Mr Yakovenko said that America was acting in "bad faith" and blocking access to the United Nations for the two regions.

He said that Russia hoped that the EU would "guarantee security" for Georgia. President Sarkozy of France, who holds the EU`s six-month rotating presidency, led negotiations for a ceasefire and a withdrawal of Russian troops from Georgia.

Mr Medvedev declared as recently as May that Russia objected to attempts to "interfere in other states` affairs, not to mention attempts to revise borders". His recognition of Abkhazia and South Ossetia has rewritten the rule-book, however, and led to fears in the West that a newly assertive Russia will seek to stir up separatism in Ukraine as a means of wrecking its Nato ambitions.

Though Russia`s invasion of Georgia was its first military incursion into another country since the Soviet invasion of Afghanistan in 1979, the once feared Red Army is still a shadow of its former self.

It has shrunk dramatically since the Soviet collapse from 4 million men to the 1.1 million now serving Russia. Despite its crushing victory in Georgia, military analysts say that Russia`s army lack modern precision weapons and satellite navigation.

The Russian Navy announced today that it will introduce a new long-range ballistic nuclear missile on submarines next year. The Bulava-M hit a target 6,700 kilometres away during test-firing yesterday.

The missile has been developed for a fleet of new strategic nuclear submarines, the Borey-class Project 955. The first of seven vessels, costing $890 million each, is currently undergoing sea trials and will be equipped with 16 Bulava missiles, each with up to 10 nuclear warheads and a range of 8,000 km (5,000 miles).

Times Online