Mumbai: Russian president Vladimir Putin has warned the US of "retaliatory steps" if Washington proceeds with plans to build a missile defence system for Europe, that includes possible aiming of nuclear weapons at targets on the continent.
Speaking to reporters ahead of a planned visit to Germany for the annual summit of the Group of Eight leaders, Putin assailed the Bush Administration's plan to place a radar system in the Czech Republic and interceptor missiles in neighboring Poland.
Washington says the system is needed to counter a potential threat from Iran.
But Iran's top security official called the US plans for the missile defense shield a "joke," saying Iranian missiles do not have the capability to reach Europe.
"Claims by US officials that installing a missile defence system in Europe is aimed at confronting Iranian missiles and protecting Europe against Iran is the joke of the year," Ali Larijani told the state-run IRNA news agency.
"The range of Iran's missiles doesn't reach Europe at all," IRNA quoted Larijani, secretary of Iran's Supreme National Security Council, the country's top security decision-making body, as saying.
Putin suggested that Russia may respond to the threat by aiming its nuclear weapons at Europe.
"If a part of the strategic nuclear potential of the United States appears in Europe and, in the opinion of our military specialists, will threaten us, then we will have to take appropriate steps in response. What kind of steps? We will have to have new targets in Europe," Putin said, according to a transcript released by the Kremlin. These could be targeted with "ballistic or cruise missiles or maybe a completely new system" he said.
Western experts believe Iran is developing the Shahab-4 missile - thought to have a range between 1,200 and 1,900 miles, which would enable it to hit much of Europe - but Iran has not confirmed such reports.
Putin hoped US officials would change their minds regarding the missile plan, but warned Moscow was preparing a response.
"If this doesn't happen, then we disclaim responsibility for our retaliatory steps, because it is not we who are the initiators of the new arms race, which is undoubtedly brewing in Europe," he said.
"The strategic balance in the world is being upset and in order to restore this balance without creating an anti-missile defence on our territory we will be creating a system of countering that anti-missile system, which is what we are doing now," Putin said.
Last week, Russia tested a new ballistic missile capable of carrying multiple nuclear warheads and a new cruise missile. While western analysts said the system has probably been under development for several years, Putin has described the test as part of Moscow's response to the US anti-missile plan.
Relations between Moscow and Washington have soured in the past year. The two former Cold War foes are at odds over Washington's missile plans, over Russia's conflicts with former Soviet nations - including Ukraine, Georgia and Estonia - and over US concerns of democratic backsliding in Russia.
Putin is nine months from the end of his second and final four-year term in office.