President Dmitry Medvedev said on Tuesday that Russia would make major defence investments to ensure its armed forces are ready to counter NATO's planned missile shield system for Europe.
"We have not closed the door to negotiation ... but we will be ready," Medvedev said during a meeting with senior army commanders, the Interfax news agency reported.
NATO says the missile shield system and is not aimed at Russia.
Russia says the system nullifies its nuclear deterrence and has threatened to aim a new generation of missiles at European military targets and deploy its own missile interceptors, if no compromise is reached.
US President Barack Obama and Russian president-elect Vladimir Putin are planning to discuss the conflict during talks in May at Camp David, Maryland.
Medvedev added that a top priority of an ongoing programme to modernise the Russian army was to make the armed forces ready to counter the NATO shield system by 2018.
Russia's defence spending will rise to 2.8 per cent of gross domestic product by 2020, and some 785 billion dollars have been earmarked for new weapons systems over the next eight years, Medvedev said.
Spending on modern weaponry and equipment will increase by 30 per cent by 2015, he said.
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