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NATO allies promised Friday to increase their annual defense budgets to retain a strong military stance while awaiting an accord with the East to cut conventional forces in Europe.

Defense ministers said they will seek increases of 3 percent discounting inflation. The goal dates to 1977 although many of the Western alliance's 16 members, including the United States, have never achieved or sustained it."Notwithstanding the announced unilateral reductions in Warsaw Pact forces and the possibility of future arms control agreements, a very considerable imbalance remains between the forces of the Warsaw Pact and NATO," Western defense ministers said in statement after a two-day meeting.

"The target of a real increase in defense expenditure of the order of 3 percent should, in the absence of tangible improvement in the balance of forces, serve as a general guide."

U.S. Defense Secretary Dick Cheney told reporters, "If we reach an agreement for reductions in armaments on both sides to equal levels, there will still be the need for modernizing these forces."

He said the prospect of reducing conventional forces in Europe, being negotiated in Vienna, is no reason to relax defense spending.

NATO last December listed alliance nations whose defense efforts were considered insufficient, fueling criticism by U.S. lawmakers who believe the United States pays too great a share for Europe's security.

Cheney said the United States will not reach the 3 percent target in higher defense spending in the next fiscal year but stressed this would not undermine U.S. commitments in Europe.

At the meeting, Cheney discussed President Bush's proposal to remove 30,000 U.S. troops and 325,000 Soviet soldiers from Europe and reduce aircraft fleets by 15 percent - NATO's by 750 planes and the Warsaw Pact's by 3,000.

He said the aircraft reductions would not include British and French planes able to carry conventional and nuclear arms.

Cheney said he assured Western allies that Washington will not withdraw from Europe 72 F-16 jetfighters in Spain. The planes, which Cheney called "absolutely vital to the defense" of NATO's southern flank, are to go to Italy when Spain ends an accord with the United States.

The proposed aircraft cuts would leave NATO and the seven-nation East bloc each with roughly 4,600 combat aircraft in Europe, NATO sources said.