US President Joe Biden pledged more American troops, warplanes and warships for Europe on Wednesday (local time) as NATO agreed the biggest strengthening of its deterrents since the Cold War in response to Russia's invasion of Ukraine.

Biden's pledge at the Madrid summit "to defend every inch of allied territory" came as the US-led military alliance also set in motion a new plan to reinforce the Baltic states and Poland against any future Russian attack.

With more German, British and other allied troops to be on alert to deploy eastward, the United States is also adding to the 100,000 personnel already in Europe by sending more warships to Spain, planes to Britain, pre-positioned weapons to the Baltics and more soldiers to Romania.

"We mean it when we say an attack against one is an attack against all," Biden said. 

The Baltics originally sought permanent NATO bases and as much as a tenfold increase to NATO's troop presence from around 5,000 multinational soldiers prior to the Ukraine invasion, as well as adding air and maritime defences.

While what NATO agreed on Wednesday falls short of that, it means allies will keep more troops in Estonia, Latvia and Lithuania, send more equipment, weapons and ammunition to the region and set up a system of rapid reinforcements.

NATO leaders agreed to move towards putting more than 300,000 troops at higher readiness.

In the past, the alliance relied on a smaller number - some 40,000 troops - to be first in line to respond to any Russian attack or other crises.

"President Putin's war against Ukraine has shattered peace in Europe and has created the biggest security crisis in Europe since the Second World War," NATO Secretary-General Jens Stoltenberg told a news conference. "NATO has responded with strength and unity."

The United States will also create a new permanent army headquarters in Poland, which was immediately welcomed by Polish president Andrzej Duda, as Warsaw long sought a permanent US military base on its soil. "It is a fact that strengthens our safety a lot ... in the difficult situation which we are in," Duda said. 

NATO also agreed a long-term military and financial aid package for Ukraine, vowing to stick with Kyiv in its struggle. In central Madrid, Ukrainian refugees held a demonstration to ask NATO for more arms for their nation, which is now facing a war of attrition against superior Russian artillery in the east of the country.

Ukrainian student Kateryna Darchyk, 20, told Reuters: "We ask for NATO to give us weapons because we have soldiers, we have people ready to fight for Ukraine, men and women who are ready to protect their country."

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END OF NORDIC NEUTRALITY

In addition, NATO's 30 leaders invited Finland and Sweden into the alliance, a decision that once ratified would end decades of Nordic neutrality by putting the two countries under the United States' nuclear umbrella. 

That was made possible after Turkey dropped its veto on the two countries' progress to membership following four hours of talks on Tuesday evening in Madrid, ending weeks of drama that threatened allied unity.

As part of the deal, Sweden and Finland agreed not to support Kurdish militant groups.

Turkish President Tayyip Erdogan had threatened to block their bids over Ankara's accusations the two countries supported a Kurdish militia in northern Syria. Turkey views the militia as an extension of the outlawed Kurdistan Workers Party (PKK) which is also deemed a terrorist group by the United States and the European Union.

Both Finland, which has a 1,300 km (810 mile) border with Russia, and Sweden, home of the founder of the Nobel Peace Prize, are now set to bring well-trained militaries into the alliance, possibly giving NATO Baltic Sea superiority.

"We are not yet covered by NATO's Article 5," Finland's Foreign Minister Pekka Haavisto told Reuters, referring to NATO's collective defence clause. "Our aim is that period should be as short as possible," he said.