Gates delivered the warning in a major policy speech at Blenheim Palace, the birthplace of Winston Churchill, in which he called for a mixture of resolve and restraint in dealing with Russia.

But he told an audience of business leaders, analysts and foreign policy thinkers that NATO's core commitment to come to the defence of any member nation under attack "must mean what it says."

"One of the triumphs of the last century was the pacification of Europe after ages of ruinous and bloody wars," he said.

"But I believe we have reached an inflection point, where much of the continent has gone too far in the other direction.

"De-militarisation has gone from a blessing into a potential impediment to achieving real and lasting peace, as real or perceived weakness is always a temptation to miscalculation and aggression," he said.

It was the second time in as many days that a senior US administration official had spoken out on Russia, following a speech Thursday by US Secretary of State Condoleezza Rice.

Gates was speaking at an event hosted by a private consultancy firm with ties to Oxford University.

He earlier attended an informal meeting of NATO defence ministers in London to discuss how to respond to Russia's August 8 invasion of Georgia after it tried to retake the breakaway province of South Ossetia by force.

He said Europe and the United States would help Georgia rebuild, and would soon be reaching other decisions that could affect Moscow's quest to join the World Trade Organization and the Organization for Economic Cooperation and Development.

Georgia's bid to join NATO, which incensed Moscow, has sparked debate within the alliance over what would have happened if the former Soviet republic had been a member.

"We need to be careful about the commitments we make, but we must be willing to keep commitments once made," he said.

Gates noted that only five of 26 NATO members met the alliance standard of spending two percent of their gross domestic product on defence.

Despite having more than two million Europeans in uniform, "the alliance nonetheless struggles to scrape together a few thousand more troops and a few dozen helicopters for our commanders in Afghanistan," he said.

"The goal must be to come together and take the steadfast and prudent steps now -- political, economic and, when appropriate, military -- to shape the international environment and choices of other powers.

"We must try to prevent situations where we have only two bleak choices: confrontation or capitulation, 1914 or 1938," he said, referring to the circumstances that led to World Wars I and II.

He said that applied not just to Russia but also Iran.

"One of those bleak choices would be presented by an extremist regime possessing nuclear weapons that could be used for blackmail or set off a regional arms race," he said.

"The other scenario is a costly and potentially catastrophic military intervention -- the last think the Middle East needs," he said.

Gates, who spent a long career as a Soviet analyst at the CIA, said Russia does not pose the global threat that the former Soviet Union did.

He said its conventional military "remains a shadow of its Soviet predecessor in size and capability."

"I believe the Georgia incursion will, over time, be recognized as a Pyrrhic victory at best and a costly strategic overreach," he said.

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