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"Russia has been strengthening and modernizing its armed forces in a western direction for some time, so there's no reason to link this to discussions on missile defence," Defence Ministry spokeswoman Ugne Naujokaityte told AFP.

Earlier in the day, a source in Russia's Baltic Fleet told the Interfax news agency that Moscow planned to deploy Iskander missiles in Kaliningrad. The slice of Russian territory is sandwiched between European Union and NATO members Lithuania and Poland, which were part of Moscow's Cold War-era stamping ground, writes LETA/ELTA.

"The modernization of Kaliningrad with such weaponry is incomprehensible," Naujokaityte said. Russian President Dmitry Medvedev had already raised hackles in November when he announced that Moscow was prepared to deploy the 500-kilometer (310-mile) range Iskanders.

He cited concerns over planned anti-missile facilities in Poland. NATO powerhouse the United States says these are needed to parry potential attacks from Iran, but Russia insists they would undermine its security.

Russia is also planning to deploy an S-400 Triumph anti-aircraft missile system in Kaliningrad within months.

Visiting Lithuania last week, NATO chief Anders Fogh Rasmussen urged Russia to refrain from building up its military near the alliance's borders, saying it was a concern for the 28-nation organization. Rasmussen said such moves were a waste of Russian money, urging Moscow to wake up to new threats and stop seeing NATO as a foe.