MOSCOW, Aug. 12 -- Russia will unilaterally reduce its nuclear arsenal and shift scarce financial resources to rebuild its conventional forces, President Vladimir Putin decided at a pivotal defense policy meeting on Friday, Russian media reported today.

Details emerging from the four-hour meeting suggest that Putin sided with the chief of the general staff and against the defense minister in the bitter dispute among the military brass.

"Great significance was attached to the development of conventional forces," the Interfax news agency said. "A decision was made on the redistribution of financial flows" away from nuclear arms.

Putin decided to let the number of Russia's nuclear warheads shrink to 1,500, less than half the 3,500 permitted under the START II arms reduction treaty, which Russia ratified this year, Russian media reported. Russia wants the United States to agree to reduce its arsenal to 1,500 warheads under a proposed START III treaty.

The size of Russia's nuclear arsenal has been inexorably shrinking because of obsolescence and the lack of money to build new missiles, airplanes and submarines to carry nuclear warheads. The speed of the Russian strategic forces' decline in the years ahead has been a subject of debate; by some estimates Russia will inevitably fall below 1,000 warheads without a major buildup, depending in part on how quickly the military retires missiles that have reached the end of their official service life.

The chief of the general staff, Gen. Anatoly Kvashnin, has lobbied for deep cuts in strategic nuclear weaponry, with the financial savings to go to conventional land, air and sea forces. Defense Minister Igor Sergeyev, a former commander of nuclear missile troops, has strongly opposed the idea, which he recently called "insane."

Sergeyev has also insisted that the strategic rocket forces remain a separate branch of the military. However, he appears to have suffered a setback on this point. As the number of land-based missiles declines over the next five years, the status of the elite strategic rocket forces as a separate branch will be "reconsidered" and parts of the force will fall under air force command within two years, Interfax said.

The decisions made Friday are part of Putin's efforts to fashion a 15-year plan for armed forces development. On the one hand, Russia wants to maintain a strategic nuclear arsenal, a keystone in the country's claim to superpower status.

On the other hand, Russia has fought three land wars in the past 20 years, including the present conflict in Chechnya, in which deficiencies in its conventional forces were exposed, including inadequately maintained equipment, ill-trained troops and poor coordination. Kvashnin has argued that over-reliance on nuclear weapons has sapped the conventional forces' strength.

Putin hinted Friday that he had taken Kvashnin's side when he warned against "unrestrained stockpiling of weapons" and said that Russia must build an armed force it can afford. "All our steps must be . . . calculated and economically justified," said Putin, who authorized an $80 million increase in this year's $4.5 billion defense budget.

However, Kvashnin did not get everything he wanted. He had asked for the nuclear arsenal to be cut to 1,400 warheads, 100 less than the number approved, the Kommersant Daily newspaper said. Sergeyev also convinced Putin that the service life of some older missiles can be extended, Kommersant said.

One remaining wild card may be the U.S. proposal for a missile defense system. If it goes ahead, Russia's nuclear arms faction will press for a nuclear buildup, Kommersant predicted. "This is the only thing that offers the rocket people a chance for revenge," the newspaper said.

The Clinton administration has tried, so far without success, to persuade the Russian government to amend the 1972 Anti-Ballistic Missile Treaty to allow construction of a limited national missile defense system capable of shooting down a few dozen missiles.

The United States has signaled that in return for Russian concessions on the ABM Treaty, it would consider slashing the number of U.S. strategic warheads to 2,000 or fewer. But it is unclear whether Putin's decision to shrink Russia's nuclear arsenal will be accompanied by a new willingness to compromise on missile defense.

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