NATO chief Jens Stoltenberg on Thursday called on allies to meet commitments made two years ago and boost defence spending as the alliance deals with a "challenging security environment."
He spoke after talks with Dutch Prime Minister Mark Rutte in The Hague and ahead of what he said would be a "landmark" leaders summit in Warsaw next month.
The Netherlands has already increased defence spending to try to help meet "current threats to the east and the south" of NATO's frontiers, Rutte told reporters.
Refusing to reveal any details about current cabinet discussions on the 2017 budget, Rutte added: "I do believe that over the next years we need to find room to go further."
Netherlands boosted its defence spending by 220 million euros ($248.8 million)in the 2016 budget, to a total of 7.5 billion euros. Spending is also set to increase a further 345 million by 2020.
In 2014, at a summit in Wales NATO allies agreed to halt defence budget cuts and aim to spend two percent of GDP on their militaries.
But Stoltenberg said there was still a long way to go for that commitment to be fully implemented, although it was understandable that at first defence cuts were stopped and then budgets gradually increased.
"I understand in a way it is hard to increase defence spending. All politicians and most people I meet, they would prefer to spend money on health, on education, on infrastructure and many other areas," Stoltenberg said.
"But we need to invest in our defence, because defence is a pre-condition for our safety and security and it is the only way to secure peace. We need strong defence not because we want to fight a war. We need strong defence because we want to prevent war."
NATO members are particularly worried about "a more assertive Russia in the east and turmoil and instability in the south," he said.
NATO leaders will meet in Warsaw in early July and discuss some options put forward by military planners to station "several battalions in eastern countries," Stoltenberg said.
"Tensions are going up, we are living in a more dangerous world," he warned.
Also Thursday NATO member Denmark affirmed its commitment to the alliance in announcing it would acquire 27 new F-35 fighter planes to replace its ageing F-16 fleet.
"Denmark will continue to contribute at a high level to NATO operations, exercises and capacity," said Prime Minister Lars Lokke Rasmussen.
The military investment approved by the Danish parliament is estimated to cost 2.7 billion euros.