Putin, who must step down at the end of his second term next year, also said he would back the ruling United Russia party in December parliamentary elections, confirming that he wants to retain major political influence.

In a phone-in broadcast live on state television, Putin told servicemen at the Plesetsk nuclear missile base that Russia would build another nuclear submarine next year and was also planning a "completely new" atomic weapon, about which he did not elaborate.

"We have grandiose plans and they are absolutely realistic," Putin said, speaking hours after the military announced the successful test firing of a Topol intercontinental ballistic missile.

He called the US intervention in Iraq a "dead end" and called on Washington to set a deadline for the withdrawal of troops.

Saying that Iraq was invaded because of its oil wealth, Putin assured one caller that Russia could not suffer the same fate. To think so, he said, was "political erotica."

Putin then swiped at Washington's tough stand on Iran, saying Russia's insistence on negotiations over its nuclear power programme was better than "threats, sanctions or even force."

Putin's sixth phone-in during eight years in power came in for particular scrutiny for clues to Putin's future political career after December parliamentary and March presidential elections.

Putin, 55, has left the world guessing about what he will do after the March election, in which he is barred by the constitution from seeking a third consecutive term.

The former KGB officer who came to power in 2000 repeated that he will step down, saying "there will be another person here in the Kremlin in 2008."

He gave his backing to the United Russia party in the parliamentary election, saying this party's victory would ensure that his policies over the last eight years continued.

"Imagine that people come to power who do not agree with these decisions, it would be easy to reverse them.... It is therefore extremely important that parliament is effective," Putin said.

Putin has previously said he is considering taking up the prime minister's post after leaving the Kremlin, but he appeared to scotch speculation that he wants constitutional changes transfering power from the Kremlin to the government.

He said he was "against cutting the powers of the president of Russia," Interfax said.

On the economy, Putin trumpeted economic growth of 7.7 percent, but conceded that the government was so far unable to control inflation of 8.5 percent and rising beyond "the planned parameters."

There has been a more than doubling of foreign investment, 13.4 percent increase in incomes, and 5.1 percent increase in pensions, he said, while gold and foreign currency reserves are at record levels.

Putin also claimed credit for a slowdown in the country's dramatic population plunge, saying that government benefits to families were having an effect.

Although Putin says he will step down next year, he remains by far the dominant political force in a country where there is almost no outspoken opposition.

Adding to the mystery, no major politician has yet expressed interest in seeking the presidency, while polls indicate the parliamentary election will give Putin's United Russia party an overwhelming majority.

Speculation is mounting that Putin will seek to remain in control even after quitting the presidency. Or he may return to the Kremlin for a third term after a break -- something the constitution does not bar.

Later Thursday Putin was to meet Israeli Prime Minister Ehud Olmert in Moscow for talks expected to focus on Iran's Russian-backed nuclear programme.

Putin was in Tehran on Tuesday, the first visit to Iran by a Kremlin leader since World War II.

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