May 9 (Bloomberg) -- President Dmitry Medvedev said Russia's military is ``gaining in strength and power like all of Russia'' in a speech on Moscow's Red Square on the 63rd anniversary of the victory over Nazi Germany in World War II.

Medvedev presided over the nation's biggest display of military hardware since the Soviet era as Russia seeks to reassert its status as a political and economic force.

Tanks, intercontinental ballistic missiles and armored vehicles rumbled across the paving stones as Medvedev watched from a viewing platform seated next to Prime Minister Vladimir Putin, his longtime ally and predecessor in the Kremlin. Strategic bombers, fighter jets and an An-124 ``Ruslan,'' the second-largest plane ever mass-produced, then roared through the sky over central Moscow.

``The history of the world wars shows that armed conflicts don't arise on their own; they are incited by those whose irresponsible ambitions take precedence over the interests of countries and entire continents, over the interests of millions of people,'' Medvedev said.

Defense Spending

Russia increased defense spending 22 percent last year to 835.6 billion rubles ($35.2 billion) as it tries to upgrade its military. In a speech to parliament yesterday, Putin called for more spending on military equipment and higher salaries for soldiers and civilian personnel.

``Only a battle-ready, well-equipped military with strong morale can defend the sovereignty and integrity of the country,'' he said. As president, Putin also restored Soviet symbols, such as the music of the Soviet anthem, albeit with new words.

Putin has clashed with the North Atlantic Treaty Organization over its expansion toward Russia's borders and with the U.S. over its plans to install elements of a missile-defense system in Poland and the Czech Republic, saying these moves threaten Russia's security.

Putin said after a meeting with German Chancellor Angela Merkel on March 8 that Medvedev would defend Russia's interests as aggressively as he had. Medvedev ``will be free to demonstrate his liberal views, but he isn't any less of a Russian nationalist, in the positive sense of the word, than I am,'' he said.

`Great Celebration'

As the parade began, a soldier marched across Red Square carrying the same Soviet flag that flew 63 years ago during the Red Army's victory parade in Berlin, in which his grandfather took part. Acting Defense Minister Anatoly Serdyukov arrived standing in a Soviet-era Zil convertible to review the assembled troops.

``This is a great celebration,'' Alexei Golovlyov, 82, said after watching the parade. ``I was especially pleased to see the planes because I served as a navigator starting in 1943. Didn't leave the army until 1950,'' he said, wearing his faded World War II uniform laden with medals.

``It just makes you feel good; brings back a lot of memories,'' said Angelina Makletsova, 85, who served as a military nurse during the war. ``I made it as far west as Romania, but I finished the war in the Far East,'' she said, adding that she donated 10 1/2 liters of blood for wounded soldiers. She traveled from the city of Smolensk in western Russia to attend the parade.

`Saber Rattling'

Soldiers wearing World War II-era uniforms carried red flags from that era with the words ``For Our Soviet Motherland'' over a portrait of Vladimir Lenin. The parade ended with war veterans, including Golovlyov and Makletsova, walking across the square past St. Basil's Cathedral to the applause of military and government officials.

The last exhibition of military hardware on this scale in Moscow was in 1990, a year before the Soviet Union collapsed. Military parades were also held in cities across Russia today.

``This isn't saber rattling,'' Putin said of the parade on May 5. ``We're not threatening anyone and we don't plan to do so. We're not imposing anything on anyone. We have enough of everything. This is a demonstration of our growing potential in the area of defense.''

Moscow's city government will spend an estimated 1 billion rubles ($40 million) to repair roads damaged by tanks and other military equipment during rehearsals in the days leading up to the parade, the government said on its Web site.

To contact the reporter on this story: Maria Levitov in Moscow at mlevitov@bloomberg.net

Last Updated: May 9, 2008 06:41 EDT