US President Donald Trump told fellow western leaders at the recent G7 summit that the NATO alliance is "as bad as NAFTA" -- a North American trade deal that he has threatened to tear up.

The comment, which will increase concerns that the Atlantic allies are headed for a bust up at their summit next month, was reported Thursday by US news site Axios and confirmed by a European diplomat.

The G7 summit in Quebec earlier this month was already known to have been a frosty affair, with Trump facing off alone against the leaders of the world's next six richest democracies over trade.

But his barbed aside underlines that the US leader's hostility to multilateral agreement extends to the NATO alliance, the cornerstone of Western security for decades.

News of his remark came just as the White House and the Kremlin announced that Trump and NATO's great foe President Vladimir Putin of Russia will meet in Finland straight after the alliance's summit.

The NATO allies are due to meet on July 11-12 in Brussels for a summit that will be clouded by Trump's angry claims that Europe is exploiting the United States by underspending on defense.

NATO chief Stoltenberg welcomes Trump-Putin summit
Brussels (AFP) June 28, 2018 - NATO chief Jens Stoltenberg on Thursday welcomed next month's summit between the US and Russian presidents, saying it was in line with the alliance's policy of talking to Moscow while maintaining strong defence.

The July 16 meeting between Donald Trump and Vladimir Putin in Helsinki will come hot on the heels of a NATO summit where the US leader is expected to upbraid European members of the alliance for not spending enough on their own defence.

Relations between NATO and Russia have slumped to their lowest ebb since the Cold War in the wake of Moscow's 2014 annexation of Crimea from Ukraine, but Stoltenberg insists dialogue must continue.

"I welcome the upcoming meeting between President Trump and President Putin because I believe in dialogue. NATO's approach to Russia is what we call a dual-track approach, it is defence and dialogue," Stoltenberg said as he arrived for an EU summit.

"Dialogue is not a sign of weakness, dialogue is a sign of strength. As long as we are strong, as long as we are united we can talk to Russia."

There have been fears that under Trump, with his "America First" rhetoric and repeated criticism of traditional allies in Europe, the transatlantic bond that has underpinned NATO since 1949 could be under threat.

While NATO has ramped up its defences in the east of the alliance to counter the threat from the Kremlin, Trump has sought to improve relations with Putin.

The US president -- whose 2016 election campaign is under investigation over possible collusion with Moscow -- called for Russia to be re-admitted to the G7 group of industrialised democracies from which it was suspended after annexing Crimea.

Stoltenberg insisted that US support for NATO is not in question, pointing to the increased American military presence and spending in Europe under Trump.

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