MOSCOW - Russia stepped up its Cold War rhetoric on Sunday with President Vladimir Putin warning it would point missiles at European targets if the US expands its nuclear defences near its borders.

Together with Foreign Minister Sergei Lavrov, Putin upped the stakes in a war of words with Washington over US missile defence shield plans that have caused a sharp downward spiral in relations.

Russian President Vladimir Putin presides a Cabinet meeting in the Moscow Kremlin,in this Monday, March 26, 2007, file photo. Putin warned in an interview published Sunday that U.S. plans to build a missile defense system in Eastern Europe would force Moscow to find missile targets of its own in Europe. [AP]

"If the US nuclear potential extends across the European territory, we will get new targets in Europe," he said in an interview with newspapers from the Group of Eight industrialised nations.

"It will then be up to our military experts to identify which targets will be aimed by ballistic missiles and which ones will be aimed by cruise missiles," he said.

Lavrov, meanwhile, shrugged off American insistence that its plan to deploy missile defence hardware in Poland and the Czech Republic posed no threat, casting it as an attempt to encircle Russia militarily.

The US plan "wonderfully fits the overall picture of American global anti-missile defence, which according to our analysis -- just look at the map -- is being deployed along Russia's perimeter, and also China's, incidentally."

"If strategic components of the American arsenal appear in Europe near our borders, we are obliged to ... cut off potential threats from that deployment," Lavrov said in comments broadcast on the state-run television channel Vesti-24.

After warning repeatedly that the US proposals would set off a new arms race, Moscow tested a new multi-warhead missile last week that Putin said was a direct response to US actions.

The interview with Putin was due to be published on Monday but pre-released by Germany's Der Spiegel magazine. Putin and his peers are meeting for a three-day G8 summit which begins in Germany on Wednesday.

"The anti-missile shield is part of a nuclear system that protects American territory. For the first time in history, elements of it are being moved to Europe," Putin said.

"We want to re-balance the defence instruments with more efficient offensive equipment but we know that this could lead to a renewed arms race for which we are, however, not responsible."

Tensions over the plan have contributed to sending relations between the two states to levels many analysts say haven't been seen since the Cold War.

But in spite of the sharp words, Lavrov pointed to a previous avenue of Russian cooperation with the West on missile defence, saying: "It would be better to resume work within the framework of the NATO-Russia Council on creating theatre missile defence."

Developing a missile defence system to protect deployed troops from missile attacks is one of several joint programmes by the NATO-Russia Council, and is scheduled to be completed by 2010.

Washington says the central European shield, which foresees 10 missile interceptors in Poland and radar in the Czech Republic, would protect against potential threats from states such as Iran or North Korea.

"The Cold War is over. I don't view Russia as an enemy and I've got a good relationship with Vladimir Putin and I intend to keep it that way," President George W. Bush told Bulgarian National Television (BNT) on Friday.

But Putin, in the interview, rejected the claim that the missile defence was about Iran.

"We are told that this defence system serves against Iranian missiles but no Iranian missile has such a capability. It therefore becomes evident that this concerns us, the Russians," Putin said.