Russia must modernize its armed forces and upgrade its nuclear deterrent, in part by building a new air and space defence network, the president said Friday.

President Dmitry Medvedev also announced plans to begin large-scale production of warships, primarily nuclear-powered submarines armed with cruise missiles.

Medvedev said the need for the modernization was demonstrated by last month's military conflict with Georgia. Russia responded to Georgia's attack on the breakaway region of South Ossetia with overwhelming force and easily crushed the Georgian army, but the brief war highlighted Russia's aging arsenal.

"We must ensure superiority in the air, in carrying out precision strikes at land and sea targets and in the timely deployment of forces," Medvedev told military commanders after military exercises in the southern Orenburg region. His remarks were posted on the Kremlin's web site and carried by state news agencies.

The president said Russia must have "a guaranteed nuclear deterrent system" in place by 2020, and he gave military commanders until December to come up with a plan.

Medvedev emphasized the need for nuclear-powered submarines armed with cruise missiles and also multipurpose attack submarines.

But he made no mention of the new Borei-class nuclear submarines, which are designed to carry a new intercontinental missile that is seen as a key future component of Russia's nuclear forces.

The missile was successfully test fired last week after repeated failures. The first of the new submarines is to be commissioned later this year and two more are being built.

Russia's economic troubles after the 1991 Soviet collapse hit the armed forces hard. But in recent years, flush with oil profits, the Kremlin has been pumping more money into new weapons systems.