The American defence secretary, Mr Donald Rumsfeld, has presented fellow Nato European defence ministers with a plan for a new rapid reaction force, and briefed them about Iraq's weapons capabilities.
He urged that Nato must adapt to the need to fight terrorists or rogue states or accept that it is irrelevant.
He added that the US remained committed to the Atlantic alliance but that it had to modernise and improve on a military capacity constructed around fighting the Soviet Union.
Mr Rumsfeld's proposal is for a 20,000-strong force which, if approved, would give the alliance an important new military capability.
This new rapid response force could be deployed anywhere in the world, not just in Nato's normal European theatre of operations.
If authorised when Mr George Bush, Mr Tony Blair and other Nato leaders meet in Prague in November, it will have rotating brigades of 5,000 soldiers drawn from US and European forces, armed with hi-tech weapons and protected against chemical and biological attack.