Russian President Vladimir Putin struck back at recent U.S. criticism of his policies Wednesday, suggesting that Washington puts its political interest above democratic ideals and emphasizing that Russia must increase its military and economic clout to resist foreign pressure.

In the seventh state of the nation address since his 2000 election, Putin concentrated largely on domestic issues, calling for measures to reverse a demographic decline that has shrunk Russia's population by millions since the Soviet collapse.

But amid increasingly vocal American criticism of his domestic and foreign policies, Putin also issued a veiled but clear response to Vice President Dick Cheney's accusations that Moscow is rolling back on democracy and strong-arming its ex-Soviet neighbors.

"Where is all this pathos about protecting human rights and democracy when it comes to the need to pursue their own interests?" said Putin, who also used a fairy-tale reference to criticize the aggressive U.S. course in global affairs.

"We are aware what is going on in the world," he said. "Comrade wolf knows whom to eat, it eats without listening and it's clearly not going to listen to anyone."

Devoting much of the hour-long speech to defense, Putin stressed that Russia needs a strong military not only to guard against terrorism and attacks but also to resist political pressure from abroad. He noted that Russia's military budget was 25 times lower than that of the United States.

"Their house is their fortress — good for them," he said. "But that means that we also must make our house strong and reliable."

"We must always be ready to counter any attempts to pressure Russia in order to strengthen positions at our expense," Putin said. "The stronger our military is, the less temptation there will be to exert such pressure on us."

Putin said the government would work to strengthen the nation's nuclear deterrent as well as conventional military forces without repeating the mistakes of the Cold War era, when a costly arms race against the United States drained Soviet resources.

"Our response must be based on intellectual advantage, it must be asymmetrical and less costly while increasing the reliability and efficiency of our nuclear triad," Putin said, adding that the nation will strengthen all its components — long-range aviation, land-based strategic missile forces and nuclear submarines.

He said Russia would soon commission two nuclear submarines equipped with the new Bulava intercontinental ballistic missiles — the nation's first since Soviet times — while the land-based strategic missile forces will get their first unit of mobile Topol-M missiles.

He said that the new missiles and warheads, which can change direction in flight, will allow Russia to preserve a strategic balance without damaging the nation's economic development goals.

Putin also said Russia should focus on investment and innovation to win its deserved place in the world economy. He called on the government to work more effectively to raise Russians' standard of living, making a customary — though so far ineffective — dig at state corruption. A number of officials "have enriched themselves at the cost of the majority of citizens," he said.

Putin acknowledged that his goal of doubling the gross domestic product within a decade now looks unlikely, due to growth falling slightly short of expectations in the last couple of years.

However, he stressed that overall economic developments have been positive, and took credit in particular for the explosive growth in the market capitalization of gas monopoly OAO Gazprom over the last year.

"This didn't happen by itself ... but as the result of certain actions by the Russian government," Putin said.

He identified obsolete equipment and poor energy efficiency as two of the factors holding back the Russian economy's competitiveness. Much of the equipment produced in Russia is "decades out of date," he said, and "energy efficiency is much lower than in competing nations."

In another apparent barb aimed at the United States, he said countries should not use Russia's World Trade Organization membership negotiations as a vehicle to make unrelated demands.

"The negotiations for letting Russia into the WTO should not become a bargaining chip for questions that have nothing in common with the activities of this organization," Putin said.

In April, U.S. senators visiting Moscow said Russia's democracy record and its stance in the Iranian nuclear crisis would influence Congress as it considers Moscow's bid to join the global trade body.

Expressing concern over what he said was an annual decline of nearly 700,000 people a year, Putin said that childcare benefits should be increased and other incentives created to raise the birthrate.

"We must at least stimulate the birth of a second child," said Putin, lamenting that concerns about housing, health care and education and income prompt many families to stop at one.