"Just as in the past, Russia must be sure that its nuclear arsenal is up to the demands of the modern world," Putin added.

Russia considers itself free to modernise its nuclear missile force, including multiple warhead weapons, because the START II strategic arms reduction agreement has not yet come into force.

In recent months Putin has said several times that his country will soon acquire new nuclear arms capable of penetrating all existing defence systems

START II, which was signed in 1993, is aimed at reducing the number of nuclear warheads held by the United States and Russia, to 3,500 and 3,000 respectively.

But in May 2002 Putin and his US counterpart George W Bush signed a new agreement that largely overtook START II.

The two countries pledged to cut the total number of nuclear warheads held between them from 6,000 to between 1,700 and 2,200 by 2012.

"We have several very large penetrators we're developing," he told defense reporters.

"We also have -- are you ready for this - a 700-tonne explosively formed charge that we're going to be putting in a tunnel in Nevada," he said.

"And that represents to us the largest single explosive that we could imagine doing conventionally to solve that problem," he said.

The aim is to measure the effect of the blast on hard granite structures, he said.

"If you want to model these weapons, you want to know from a modeling point of view what is the ideal best condition you could ever set up in a conventional weapon -- what's the best you can do.

"And this gets at the best point you could get on a curve. So it allows us to predict how effective these kinds of weapons ... would be," he said.

He said the Russians have been notified of the test, which is scheduled for the first week of June at the Nevada test range.

"We're also making sure that Las Vegas understands," Tegnelia said.

When police found the explosives on Tuesday, they called in the Bloomington bomb squad for assistance. The materials were taken to a remote area to be detonated.

Neighbors were evacuated, but one said she thought the suspects were playing with fireworks.

"They were getting increasingly loud and smoky, but nothing that would ... tremble the earth," said neighbor Corrine Johnson.

Albert Lea police Chief Dwaine Winkels said it was the largest bomb-making operation he's seen in 20 years of law enforcement.

Four people were arrested.

Israeli investigators said the bomber had hitched a ride while dressed as an orthodox Jew, before detonating his explosives inside the vehicle.

The attack was the first lethal suicide bombing this year and comes two days after the Israeli general election.

Hours later Israeli aircraft carried out strikes on militant targets in the northern Gaza Strip, the military said.

No casualties were reported in the attack, which targeted sites allegedly used by Palestinian militants to fire rockets into Israel.

A militant offshoot of the Palestinian Fatah political movement has said it carried out the bomb attack near Kedumim.

The al-Aqsa Martyrs' Brigade named the bomber as Ahmed Masharka, from the city of Hebron in the West Bank.

'Natural response'

The explosion took place just after nightfall, near a petrol station outside the settlement.

Rescue workers said the three bodies immediately found at the scene were travelling in the car when the bomber detonated his explosives.

A fifth body was found nearby several hours later but remained unidentified.

It is unclear if the bomber was travelling alone in the car when his device exploded, or whether he had hitched a ride in the vehicle with three Israelis.

Israeli spokesman David Baker blamed the Palestinian Authority for the bombing.

"The Palestinians refused to lift a finger to prevent terror attacks against Israelis, and we saw the results tonight."

But Hamas MP Mushir al-Masri said Israel's policies invited attacks.

"It was a natural response to the Israeli crimes, to the continued Israeli killing, incursions and arrests," he said.

"Our Palestinian people have the right to defend themselves."

The surge in violence in Gaza came one day after a Palestinian suicide bomber killed four Israelis in the West Bank. Top Hamas officials defended the suicide bombing as "resistance" against Israeli "crimes," putting them at odds with Palestinian President Mahmoud Abbas, who condemned the bombing.

Hamas trounced Abbas's Fatah faction in January parliamentary elections and officially took control of the Palestinian government this week.

The Popular Resistance Committees, an umbrella group of militants in Gaza often responsible for rocket attacks against Israel, accused the Jewish state of assassinating Abu Youssef al-Quqa, one of the group's two top commanders.

"We declare an open war against the Zionist enemy," said PRC spokesman Abu Abir.

But Abu Abir later accused Palestinian security officials of collaborating with Israel. He singled out several by name, calling them "traitors" and vowing "We will behead them."

A gunfight later broke out between PRC members and Palestinian security forces. At least one person was injured in the brief exchange of fire.

The Gaza blast occurred near a mosque at the start of Friday prayers and all that was left of the car was a mangled heap of charred metal.

The boy was wounded in the head by flying debris, though medics said the injury was not life threatening.

The PRC has refused to recognize a March 2005 truce with Israel, citing the Jewish state's non-compliance.

Abu Abir said Quqa and other PRC leaders had recently attended a meeting to draw up plans to attack Israeli targets. "He (Quqa) said he knew he was going to be assassinated soon," Abir said.

Palestinian Foreign Minister Mahmoud al-Zahar, a top Hamas leader, said of the Gaza explosion: "It means that the Israeli aggression will not stop. It means our resistance should continue."

HAMAS VS ABBAS

The conflicting statements of Hamas and Abbas on Thursday's suicide bombing were the first since the president swore in the Palestinian Authority's first Hamas government on Wednesday.

The suicide bombing, claimed by al-Aqsa Martyrs Brigades, occurred days after Israeli leader Ehud Olmert's Kadima party won elections on a platform of setting Israel's borders in the occupied West Bank unilaterally in the absence of peace talks.

Palestinians say such a move would annex land and deny them the viable state they seek in the West Bank and Gaza Strip.

Israeli officials said the bomber, whose group is part of Abbas's Fatah faction, was disguised as a religious Jewish hitchhiker and blew himself up when Israelis in a car picked him up near a settlement late on Thursday.

"The Palestinian Authority does not accept it. We condemn it and we don't think it will help the peace process," Abbas told a news conference in Cape Town, South Africa.

But Hamas, which now controls the Palestinian Authority, described the suicide bombing as a "natural response to Israeli crimes." Information Minister Youssef Rizqa said: "Resistance is a legitimate right for people under occupation."

Abbas has said he could overrule Hamas, which is pledged to Israel's destruction, if it continues to block peacemaking.

Hamas is under pressure from Abbas, Washington and the European Union to stop violence, recognize Israel and respect interim peace deals. It carried out about 60 suicide bombings during an uprising that began in 2000, but has upheld the truce.

Prime Minister Ismail Haniyeh said in a column published on Friday in a British newspaper that "we have every right to respond with all available means" if Israel continues to launch attacks and to impose "sanctions" on Palestinians.

Haniyeh also ruled out any talk of his Hamas-led government recognizing Israel or ending the fight against the Jewish state until it commits itself to withdrawing from Palestinian land.

Hamas's cabinet is set to meet for the first time on Tuesday.

The cross-party intelligence and security committee did not accuse any agency of negligence over the attacks.

But the cross-party committee is asking why the lead bomber, who was known to police, was not fully investigated, despite being known to security officials.

Four suicide bombs on three Tube trains and a bus killed 52 people and injured hundreds on 7 July 2005.

Intelligence lessons of 7/7

BBC security correspondent Frank Gardner said the committee had for six months been "interviewing and examining the work of the intelligence and security agencies to see if the July 7 bombings could have been prevented".

"Could they have been prevented with better intelligence? Yes. Could they have been prevented given the resources that the agencies had? They think probably not.

"They are not pointing the finger of blame at anybody," he told BBC Radio 4's Today programme.

"Inevitably there will be suspicions of a whitewash here, public suspicions."

But he added: "It certainly doesn't exonerate [the agencies] - the bombers got through, they failed to stop it happening.

"But was anybody actually negligent? No."

Recommendations

The committee did make a number of recommendations, including suggesting changes to the "secretive and complicated" system of alert and threat levels, Mr Gardner said.

The national threat level was lowered from "severe, general" to "substantial" just before 7 July 2005.

Committee members believe this made no difference to the bombers' plans, but that the public needs to be better informed.

Centre for Intelligence and Security Studies

The committee interviewed many members of the police and intelligence community.

Whitehall officials told the BBC that the risk of home-grown terrorist attacks on Britain has increased substantially since 2003.

They say that new plots are being detected, and that 50% of them involve British citizens living in the UK.

Languages

The committee said it accepted that gathering intelligence on the activities of British militants in Pakistan was extremely difficult prior to 7 July, but says it should still have been better.

Our correspondent said there had been a "sea change", with the Pakistani authorities becoming more co-operative, since the bombings.

He also said the committee was "very aware that the security and intelligence agencies - MI5 and MI6 - didn't have and still don't have enough people with languages - that's their problem".

"The whole 'oil tanker' of intelligence needed to turn round a lot faster than it did, away from the Cold War to confronting the threat of religiously-inspired terrorism."

Professor Anthony Glees, head of the Centre for Intelligence and Security Studies at Brunel University in west London, told BBC News the security service had failed.

"It is the body that is charged with having good predictive intelligence and what the London attacks show is that there was no good predictive intelligence," he said.

"They did not look carefully enough at the sort of people who might be tempted into becoming terrorists."