Russia, Venezuela Sign Military Deal Worth $1 Billion, Form Oil Consortium

MOSCOW -- Russia continued its international muscle-flexing on Friday, strengthening its ties to Venezuela through a $1 billion military loan and a new oil consortium as it announced an upgrade of its own military focusing on nuclear deterrence and permanent combat readiness.

After a military exercise on Friday in the southern city of Orenburg, near the border with Kazakhstan, the Russian president, Dmitri A. Medvedev, declared that by 2020 Russia would construct new types of warships, including nuclear submarines carrying cruise missiles and an unspecified air and space defense system.

The moves point to continuing tension between Russia and the West after the five-day war in Georgia. Response in Washington was muted, as officials weighed whether the moves were merely a restatement of existing initiatives or should be interpreted as one early sign of a new, if slow-motion, arms race. Secretary of State Condoleezza Rice said in an interview with Reuters: "The balance of power in terms of nuclear deterrence is not going to be affected by those measures."

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