Russian President Dmitry Medvedev warned the West on Tuesday that the two sides' failure to agree on a missile shield for Europe could spark an arms race that would see Russia deploy new weapons abroad.
The stark warning from the president came during a broad state-of-nation address that Medvedev primarily devoted to domestic issues.
But he diverged briefly into foreign affairs to present the West with a choice: either work with Russia on missile defences or face consequences.
"In the coming ten years, we are facing the following alternative," said Medvedev in nationally-televised remarks. "Either we agree on anti-missile defence and create full-fledged, joint cooperation, or – if we fail to reach constructive cooperation – (we will face) a new round of the arms race," Medvedev said.
"And then we will have to make a decision on deploying new strike forces."
Russia and NATO had agreed in Lisbon this month to look into ways in which the two could work together on a new continental shield that has been backed by Washington but staunchly opposed by the Kremlin.
Medvedev has demanded that Russia be assigned an equal say in how the system works – a request that would require a never-before seen degree of military cooperation and intelligence sharing.
There have been conflicting reports about whether Russia actually made a concrete proposal to the 28-member Alliance.
The Wall Street Journal reported last week that Medvedev suggested that Russia take responsibility for shooting down missiles which fly over its zone of responsibility in the east.
This "sectoral missile defence" approach was mentioned briefly by Medvedev during his Lisbon address – although neither he nor other Russian officials spelled out how this system would work.
NATO gave no immediate response to the reported offer and Russian officials later said that no formal proposal had been made.