"Nato enlargement is not a threat to anybody," Nato Secretary General Jaap de Hoop Scheffer said on the opening day of a meeting in Funchal on the Portuguese island of Madeira.

"Nato enlargement means more democracy, more stability, more security, more rule of law, more democratic control of the armed forces. Who could be worried about Nato enlargement? I'm not," he added to applause from the gathering.

Moscow has opposed successive Nato enlargements in eastern Europe.

Croatia is expected to join in 2008 and Bosnia, Montenegro and Serbia have joined Nato's Partnership for Peace programme -- a first step towards membership.

Albania and the former Yugoslav Republic of Macedonia have also applied to join the alliance.

Russia is angry at Nato's likely expansion into the Balkans, but is even more vocal in its opposition to the possible candidature of neighbours Georgia and Ukraine, both former Soviet republics.

It is also furious at US plans to place a radar base in the Czech Republic and 10 interceptor missiles in neighbouring Poland as part of a missile defence shield.

Washington says the shield would protect against a potential threat from "rogue" states in the Middle East like Iran.

In a newspaper interview published on Monday, Polish President Lech Kaczynski ruled out any direct talks with Russia on the shield insisting the matter was solely for Washington and Warsaw to discuss.

"Russia's belief that it would be endangered is absolutely false," he told the Polish daily Dnes.

The Czech Republic and Poland, along with Hungary, became the first former Soviet satellite states to gain NATO membership in 1999.

Russian President Vladimir Putin has said the creation of the missile defence system could lead Moscow to freeze compliance with a European weapons control treaty and spark a new arms race.

"What is happening in Europe that is so negative that one has to arm eastern Europe with these new weapons?" he asked last week during an official visit to Austria.

Addressing lawmakers in Funchal on Saturday, a senior US defence department official said the system would be too small to end Moscow's deterrent capability in the region and posed no threat to Russia.

"The system is defensive only and it is not designed against Russia," said Daniel Fata, who specifically covers European and NATO policy.

Over 300 Nato lawmakers as well as representatives and observers from over 15 other nations including Russia were taking part in Monday's Parliamentary Assembly meeting in Funchal.

The president of the assembly, Portugal's Jose Lello, said that while Nato and Russia had many common interests "there are equally many things that divide us and the list of disagreements seems to lengthen by the day".

"We need to find common ground to develop a better understanding of each other's perspective and to create a basis for more effective dialogue and cooperation," he added.

The next Nato Parliamentary Assembly meeting is scheduled for October in Reykjavik, Iceland.