Russian President Vladimir Putin criticized the U.S.-led war in Iraq on Thursday, saying that experience showed the need for resource-rich countries like Russia to build up their armed forces to defend themselves.

"Thank God Russia is not Iraq," Putin said during a live televised national question-and-answer session. "It is strong enough to protect its interests within the national territory and, by the way, in other regions of the world."

Answering a questioner who asked about supposed U.S. intentions to gain control over Russia's huge, resource-rich interior, Putin said:

"I know that such ideas are brewing in the heads of some politicians. I think it is a sort of political eroticism which maybe gives someone pleasure but will hardly lead anywhere and the best example of that is Iraq."

"... What we are doing to increase our defense capability is the correct choice and we will continue to do that," Putin added.

Putin, who faces parliamentary elections in December, hailed Russia's continued strong economic growth and rising living standards during exchanges with questioners connected live from different Russian cities.

He admitted that inflation, which at 8.5 percent in the year to date has already exceeded the government's target for the whole year, was a problem but blamed global economic factors such as cuts in European agricultural subsidies and demand for biofuels.

Putin also claimed that Russia's demographic crisis was easing, with the birthrate reaching a 15-year high and the death rate falling to its lowest level since 1999.

PUTIN'S FUTURE

More than a million Russians applied to quiz Putin in the session, the sixth such annual event he has held to show he is in touch with the nation.

Kremlin-watchers were following the event carefully for clues on what Putin plans after he steps down next year: whom he will endorse to succeed him and what role Putin himself will take to preserve his influence.

This year's format began as in previous years, with a strong focus on domestic, bread-and-butter issues such as pensions, schools, prices and investment in the Far East.

A selection of questions on the organizers' Web site, www.president-line.ru, suggested citizens were preoccupied with issues including rising utility bills, healthcare and students' finances.

The site said that by 10:30 (2:30 a.m. EDT) on Thursday, 1.607 million questions had been submitted.

The session is almost certain to be Putin's last before he steps down as president next year, when his second term ends. The constitution bars a president from serving more than two consecutive stints.

Putin has said he will endorse the person he thinks is best suited to replace him. Opinion polls suggest that given Putin's personal popularity, that person will be the overwhelming favorite to win March 2008 presidential election.

With three months to go before the deadline to register candidates in that vote, every Putin pronouncement is watched minutely for hints about whom he favors for the job.

Analysts say newly appointed Prime Minister Viktor Zubkov and First Deputy Prime Minister Sergei Ivanov are front-runners, but that Putin could equally spring a surprise.

The Russian leader, who is 55, has said he will retain influence after he leaves the presidency.

He said earlier this month it was possible he could become prime minister. Some observers say he is leaving open the possibility of returning to the presidency at a later date.

Russia U.S. Putin Iraq