By Philippe Naughton and agencies in Moscow
The President's speech from the Kremlin focused on the war of words with America, Russia's military strength and the country's declining birthrate (Dmitry Astakhov/Itar-Tass)
President Vladimir Putin took a swipe at the hungry "wolf" of America today in a strident state-of-the-nation address in which he said that post-Soviet Russia should build up its economic and military might.
In his seventh annual address as president, Mr Putin also promised to tackle Russia's falling birthrate, saying that falling population levels were Russia's "most pressing problem".
But the main thrust of his speech was on the need to bolster security. Mr Putin said that Russia needed a strong military not only to guard against potential attackers but also to resist foreign political pressure.
His comments betray increased anger over what Kremlin leaders see as Western attempts to influence the affairs of Russia and its relationships with its former neighbours Soviet neighbours, such as Ukraine or Belarus.
"We must always be ready to counter any attempts to pressure Russia in order to strengthen others’ positions at our expense," Mr Putin said. "The stronger our military is, the less temptation there will be to exert such pressure on us."
Mr Putin pointed out that Russia’s military budget is 25 times less than that of the United States. "Their house is their fortress - good for them," he said. "But that means that we also must make our house strong and reliable."
Then, in a clear criticism of US foreign policy, he quipped: "As the saying goes, Comrade Wolf knows whom to eat, it eats without listening and it’s clearly not going to listen to anyone."
"Where is all this pathos about protecting human rights and democracy when it comes to the need to pursue their own interests?" Mr Putin added, in what appeared to be a veiled response to accusations by Dick Cheney, the US Vice-President, that the Kremlin's commitment to democracy was weakening.
Mr Putin said that his Government would work to strengthen the nation’s nuclear deterrent as well as conventional military forces without repeating the mistakes of the Cold War when a costly arms race against the US hampered Russia's economic development.
"Our response must be based on intellectual advantage, it must be asymmetrical and less costly while increasing reliability and efficiency of our nuclear triad," Mr Putin said, adding that the nation will strengthen all its components - long-range aviation, land-based strategic missile forces and nuclear submarines.
As part of that boost, Russia would soon commission two nuclear submarines equipped with the new Bulava intercontinental ballistic missiles - the nation’s first since the Soviet era - while the land-based strategic missile forces will get their first unit of mobile Topol-M missiles.
Mr Putin said that the new missiles and warheads which can change their route to a target that an enemy would be unable to calculate will allow Russia to preserve a strategic balance without damaging the nation’s economic development goals.
In a wide-ranging speech lasting just over an hour, Mr Putin also focused on Russia's massive demographic problems.
While mortality has increased in post-Soviet Russia, the birthrate has fallen precipitously so that one family in two has no children and the average per woman has only 1.34 - far below the rate needed to keep the population stable.
Mr Putin said that the Russian population was now declining by 700,000 per year. "We have raised this question many times but in fact have done little. We need to reduce mortality, have an effective migration policy and increase the birth rate," he said.
As part of the solution, Mr Putin proposed more than doubling child benefits.
"We must stimulate today the birth of at least a second child," he said. "What stops a women deciding to have a second child? Bad living conditions, limited income ... sometimes, God help us, the thought of whether they would be able to feed the child."
On accession to the 149-member World Trade Organisation, which would open up global markets for Russian goods and commodities, Mr Putin said that WTO member states should not use the negotiations to make unrelated demands.
Russia has so far signed bilateral agreements with the European Union, China and Japan, among others, but has yet to reach the deals it needs with the United States, Colombia and Australia if it is to join the global trade body.
In March, Mr Putin expressed frustration at the pace of negotiations, accusing the U.S. of coming up with ungrounded demands that were hindering talks. The following month,a group of visiting US senators said that Russia's record on democracy and its stance in the current Iranian nuclear crisis would influence the US Congress when it considers Russian membership of the WTO.
Mr Putin also pledged to push up economic growth - currently running at around 7 per cent a year - as part of a wider plan to double Russia's gross domestic product within a decade. That growth, he said, would come not just from continued state investment of energy revenues but from real economic liberalisation.
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