Progress toward a missile defence deal between NATO and Russia has been slower than expected but Russia would be wasting money by investing in counter-measures against an imaginary threat from the West, the head of NATO said Wednesday.

Despite a rise in anti-NATO rhetoric from Moscow in recent months, NATO Secretary-General Anders Fogh Rasmussen said progress had been made in developing practical cooperation with Russia in the past year.

I expect further progress in the coming year, he told reporters ahead of a meeting between NATO foreign ministers and their Russian counterpart Sergei Lavrov in Brussels Thursday.

However, as far as missile defence is concerned, progress has been slower than I had hoped or expected, he said, referring to an invitation to Russia to cooperate with NATO on missile defence made at a summit in Lisbon a year ago.

Rasmussen said he was pleased that Russian President Dmitry Medvedev had kept the door open to dialogue on missile defence, but noted he had also warned of Russian counter-measures if differences between Russia and NATO could not be resolved.

I hope that we can reach an agreement at (NATO's) Chicago summit in May ... It would definitely be a waste of valuable money if Russia started to invest in counter-measures against an artificial enemy that doesn't exist.

That money could . be invested for the Russian people in job creation and modernisation of Russian society.

Russia seeks legal guarantees from NATO that its missile defence system is not aimed at limiting Russia's strategic nuclear capability and wants joint control of how such a system is used. NATO wants separate systems and says Russia and NATO already have a binding agreement that they will refrain from use of force against each other.

BALTIC ENCLAVE

Last month Medvedev said he would arm Russia with missiles capable of countering the U.S. shield and set up an early-warning radar system in its Baltic enclave of Kaliningrad bordering NATO territory in a bid to press the United States to back down in the dispute.

At the same time, Medvedev also said NATO could use the radar station in Kaliningrad as part of a missile defence system if there was an agreement to cooperate.

Speaking Wednesday, Lavrov told a news conference in Vilnius that Russian concerns must be taken into account.

He said stationing of weapons in Kaliningrad, sandwiched between NATO states Poland and Lithuania, would not breach any international rules. But he said former east block allies such as Lithuania, now NATO members, should not be worried.

What we are worried about is that foreign weapons, foreign military infrastructure is being created around Russian Federation on the territory of our neighbours, he said, referring to plans to station elements of the NATO missile defence system in Poland, Romania and Turkey.

Lavrov accused NATO of violating agreements not to station substantial combat forces permanently on territory of new members that used to be part of the Soviet bloc.

Analysts say Russia is overstating the threat from the missile defence system to use the issue as a bargaining chip with the West. Recent anti-Western rhetoric has appeared aimed at a Russian domestic audience in an election period.

Russia's NATO envoy Dmitry Rogozin has suggested Moscow could reduce its support for NATO's campaign in Afghanistan if it did not heed its warnings about missile defence.

Russia lets NATO transport supplies for Afghanistan across its territory and the route has become a vital since Pakistan barred resupply via its territory last month.

(Additional reporting by Aleks Tapinsh in Vilnius)