Russia on Wednesday suspended participation in a key Cold War treaty limiting armed forces in Europe amid mounting East-West security tensions.

Russia has suspended all activities towards observing the treaty on Conventional Armed Forces in Europe (CFE) since midnight on December 12, The Russian Foreign Ministry said in a statement.

"This step has been prompted by exceptional circumstances related to the CFE's contents, which concern Russia's security and require urgent measures," the ministry said.

The treaty was a vital part of Cold War arms-restraint agreements signed between 16 NATO members and six former Warsaw Pact nations in 1990, but Russia is the only state to have signed an amended draft of the document since the strategic upheaval accompanying the fall of the Soviet Union.

In a statement issued by NATO's headquarters in Brussels, the western military alliance expressed "deep regret" over Russia's decision to unilaterally "suspend" implementation of its CFE obligations.

"This is particularly disappointing because ... (NATO) allies have worked intensively with other Treaty partners over the past months to try to resolve the Russian Federation's concerns constructively," NATO said.

NATO reaffirmed its right to "take any steps provided for by the treaty and international law," and at the same time insisted that it still wanted to "resolve the current impasse and preserve the benefits" of the treaty.

US and European officials had pressed Russia not to abstain from the treaty, saying it could lead to a disintegration of the network of Cold War security treaties and a new arms race.

In Washington, US State Department spokesman Sean McCormack said the US "deeply regrets" the suspension, calling it the "wrong decision" to make at a time when the United States is trying to work through disagreements with the Kremlin.

"We encourage Russia to reverse its decision and to work with us to resolve all outstanding concerns," McCormack said.

But Moscow bucks at the "far-fetched conditions" tied to Europe's ratification of the treaty, angry at NATO's demand it withdraw troops from breakaway regions in the former Soviet states of Georgia and Moldova.

Russia has also been angry about US plans to install a missile- defence systems in Poland and the Czech Republic, calling it a threat to its strategic nuclear arsenal even though Washington insists it is solely for countering Iran's growing ballistic missile capability.

Analysts said the suspension of the treaty Wednesday was pushed through by top Russian military brass resentful of NATO troop inspections, who lobbied President Vladimir Putin directly.

The suspension of the treaty is not a goal in itself but "a method in the Russian Federation's drive for restoring the viability of control over conventional weapons in Europe," the foreign ministry said.

The ministry's statement listed the so-called "Istanbul commitment," requiring the pullback of Russian troops from its former sphere of influence, as its main grievance with the CFE treaty.

The moratorium Wednesday highlighted worsening East-West relations one day before top US and Russian diplomats are to meet in Budapest over US missile defence plans that Duma deputy speaker Lubov Slitska earlier called a "poisonous affront to Russia's security."

Independent military analyst Pavel Felgenhauer said the main thrust against the treaty had come from the Russian military who have long resented the limits it imposed on flank deployments, viewing NATO's encroachment eastward as a security menace.

"The Russian military have always disliked this treaty. They see the inspection regimes as a form of western 'espionage' to know what is where," Felenghauer told Deutsche Presse-Agentur dpa.

He cited Russian military sources who said that the broader- ranging Open Skies treaty, allowing unarmed observation flights, among other arms restraint treaties regulating the stretch from the Atlantic to Russia's Ural mountains, were in danger of Russian recusal.

Russian army chief of General Staff Yury Baluyevsky said last month that Russia was ready to negotiate, but would not be bothered if the treaty "altogether disappeared."

The Spanish presidency of the Organization for Security and Cooperation in Europe (OSCE) on Wednesday urged Russia to reconsider its decision to suspend the treaty.

Russia's abandoning the treaty "could have security implications for all of Europe," Spanish Foreign Minister Miguel Angel Moratinos cautioned, urging the parties to resume negotiations "with renewed effort."

Russia's withdrawal is a "serious blow for Europe," said Felgenhauer.

"It means the 'de-transparency' of a regime which gave Europe an independent way of sourcing information that only the Americans now have the capacity to gather."

A high-ranking Russian defence official said that Russia had no immediate plans to redeploy troops along its Western front, but added that such plans could develop if the moratorium failed to have an affect, news agency Interfax reported.

Analysts predicted there was little chance of saving the treaty given Russia's long list of remonstrances to be discussed among the 30 nations implicated in the agreement.

"The treaty is dead," Felgenhauer said.

He added that it was quite likely that Russia would move to repopulate empty bases in the Leningrad region bordering the Baltic states.

"Redeploying troops from Siberia westward makes sense in economic terms and would send a powerful message to the west, making it win- win," he said.