Putin reaffirmed that Russia will not be the first to deploy new intermediate-range missiles in Europe, but warned that it will retaliate if the U.S. puts such missiles on the continent. He said it will not only target the host countries but field new weapons that will target U.S. decision-making centers.

He insisted that Moscow hopes to patch up its difference with the U.S., saying: “We don’t want confrontation, particularly with such a global power as the U.S.”

But he also criticized what he described as the “destructive” U.S. policy of targeting Russia with sanctions.

Speaking before lawmakers in the Russian capital, Putin added that the other weapons, which he announced last year, including the nuclear-powered Burevestnik cruise missile and the Poseidon nuclear-powered underwater drone, have been undergoing tests successfully.

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Putin also focused on a range of social issues in the annual speech, promising to raise welfare payments, improve education and healthcare, as well as remove toxic dump sites from cities.

He also said Russia needs to modernize its infrastructure, claiming 60 airports will be upgraded in the next six years.

The Associated Press contributed to this report