CRITICISM OF UNITED STATES

Speaking to an audience of about 1,000 lawmakers and government officials, the Russian president blamed the United States for a brief war with Georgia in August and the ongoing global financial crisis.

Medvedev described Georgia's military offensive on South Ossetia as a consequence of policies of the US administration, which "is over confident and intolerant of criticism, and prefers unilateral decisions."

"The conflict in the Caucasus was used as a pretext to send NATO warships to the Black Sea and then to quickly thrust on Europe the need for deploying the U.S. anti-missile system," he said.

He called for mechanisms to be established to block "misguided, selfish and sometimes dangerous decisions" by some members of the international community.

"We will not give up our role in the Caucasus. We will overcome the global financial crisis and emerge from it stronger," said Medvedev.

He added that the international political and economic systems require a dramatic overhaul.

"The lessons of the mistakes and crises of 2008 have proved to all responsible nations that the time has come to act, and it is necessary to radically reform the political and economic system," he said.

"We hope that our partners -- the new US administration -- will make a choice in favor of a full-fledged relationship with Russia," Medvedev said in the speech, which came just hours after Barack Obama won the US presidential election.

RESPONSE TO US MISSILE SHIELD

In the 85-minute speech broadcast live on television, Medvedev said Russia will deploy a short-range missile system in its Baltic enclave of Kaliningrad bordering Poland and Lithuania, in response to US plans to set up a missile shield in the area.

"The Iskander missile system will be deployed in the Kaliningrad region to neutralize, when necessary, the (US) missile shield," he said.

Russia will also deploy equipment in the western region to electronically jam the US missile defense system, said Medvedev, adding that resources of the Russian Navy will naturally be used to counter the missile shield.

The president said Russia had canceled its previous plans to take three missile regiments out of service in the central part of the country.

"We earlier planned to remove three missile regiments within the missile division stationed in Kozelsk from combat duty and discontinue the division itself by 2010. I have decided to cancel these plans," Medvedev said.

Last year, Washington proposed to establish an anti-ballistic missile shield in Central Europe, consisting of interceptor missiles in Poland and a radar station in the Czech Republic.

Moscow has consistently expressed its opposition to the US missile shield in Europe, saying it threatens its national security. However, the United States insists the shield is designed to thwart missile attacks by what it calls "rogue states."

The United States signed a bilateral treaty with the Czech Republic in July, allowing a US radar base on Czech soil.

In August, it reached another agreement with Poland on deploying parts of its global missile shield in that country.

EXTENSION OF PRESIDENTIAL TERM

Medvedev's first state-of-the-nation address also included proposals to extend the term of president to six years and that of parliament to five years. Russia's president and parliament both currently have four-year terms under the constitution.

"We are not talking about a constitutional reform, but about amendments to the constitution. Really important, but still specifying amendments, which do not affect the political and legal essence of the existing institutions," said Medvedev.

Larisa Brycheva, a presidential aide, said constitutional amendments to extend the term in office of the Russian president would not require a referendum.

However, Brycheva said the necessary amendments would have to be approved by legislatures in at least two thirds of Russian regions to come into effect, and warned that the terms of the current president and parliament would not be affected.

To counterbalance an extension of the presidential term, Medvedev also proposed expanding the constitutional rights of the Federal Assembly, saying that control functions over the executive bodies should be given to the State Duma, the lower house of parliament.

"A constitutional norm should be established, which would make it incumbent upon the government to report annually to the State Duma on the results of its work and on questions raised by the parliament," he said.