Vladimir Putin warned Sunday that Moscow would take retaliatory steps if Washington proceeds with building a missile defence system for Europe.

Speaking to foreign reporters days before he heads to Germany for a summit with U.S. President George W. Bush and other leaders of the Group of Eight, the Russian president assailed the U.S.'s plan to place a radar system in the Czech Republic and interceptor missiles in neighbouring Poland.

Putin said neither Iran nor North Korea have the rockets that the system is intended to shoot down, suggesting it would be used instead against Russia.

"We are being told the anti-missile defence system is targeted against something that does not exist. Doesn't it seem funny to you, to say the least?" an irritated Putin said.

The White House had no comment Sunday on Putin's new warning. Bush last week invited the Russian leader to the Bush family's summer compound on the Maine coast on July 1-2.

Putin lamented that the planned system would be "an integral part of the U.S. nuclear arsenal" in Europe — an unprecedented step: "It simply changes the entire configuration of international security."

He said he hoped that U.S. officials would change their minds regarding the missile plan.

"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," Putin 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 ballistic missile capable of carrying multiple nuclear warheads and a new cruise missile. While Western analysts said the system probably has been under development for several years, Putin has described the test as part of Moscow's response to the U.S. anti-missile plan.

Russia may target Europe

In an interview published by Italy's Corriere della Sera on Sunday, Putin also suggested that Russia could respond to the threat by aiming its nuclear weapons at Europe.

Asked whether the planned U.S. missile defence shield in Eastern Europe would compel Moscow to target its own missiles on U.S. military sites and other locations in Europe, Putin replied: "Naturally, yes.

"If the American nuclear potential grows in European territory, we have to give ourselves new targets in Europe," he was quoted as saying. "It is up to our military to define these targets."

Russia has not overtly targeted Europe since agreeing after the fall of the Soviet Union not to direct missiles against specific countries, according to Pavel Felgenhauer, an independent military analyst based in Moscow. However, he added, that was a simple technical matter because a missile can be given a target within minutes.

Putin also suggested that in the absence of a real threat from Iranian and North Korean missiles, the U.S. plan could be an attempt to spoil Russia's relations with Europe.

Relations sour

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 U.S. concerns Russia is backsliding on democratic reforms.

Czech Prime Minister Mirek Topolanek accused Russia on Sunday of misleading the public about the planned missile defence bases in the Czech Republic and Poland to hide Russia's internal problems.

"Russia needs an outside enemy to hide problems at home," Topolanek said.

The Polish president insisted the missile shield was purely "to prevent attacks, neutralize their effects."

"But I don't wonder at Russian present tactics because the issue is whether the Russian state … will regain influence or not," Polish President Lech Kaczynski told Polish reporters in Rome.