Struck said new security concerns since the end of the Cold War and government austerity measures had prompted the changes, which will slash spending by up to 26 billion euros (33 billion dollars) in the coming years.

Troop levels will fall to about 250,000 from 285,000 today with a new focus on anti-terror operations, conflict prevention and nation building.

"The whole world is a potential area of operations for the Bundeswehr (armed forces)," Struck told a news conference.

The cutbacks in the military will also see 10,000 civilian jobs slashed and the likely closure of 100 more bases this year, following previously announced plans to reduce the number of military facilities to 505 from 621.

Struck rejected media reports that the government planned to reduce its order of 180 Eurofighter aircraft, a four-nation collaboration designed to boost European military capabilities, saying the project would go forward as planned.

Amid a fierce debate within Chancellor Gerhard Schroeder's ruling center-left coalition on mandatory military service, Struck said there would be no changes to the conscription program before the general election in 2006.

The Greens party, junior partners in the coalition, have urged an end or significant shortening of the draft.

Struck said the new focus on international missions would not come at the expense of national defense, which he said would remain a priority of a slimmed-down Bundeswehr.

Hampered by its militaristic past, Germany has only recently mustered the confidence to deploy troops overseas.

Kosovo in 1999 marked the first time its armed forces had been used in an offensive role abroad since World War II, and Berlin is now a major contributor to US-led peacekeeping missions, notably in Afghanistan and the Balkans.

WAR.WIRE