WARSAW (AFP) - President Barack Obama on Tuesday proposed an initiative of up to US$1 billion (S$1.26 billion) to finance extra US troop, air and naval deployments to "new allies" in eastern Europe amid an East-West showdown over Ukraine.

The "European Reassurance Initiative," which must be approved by Congress, would also build the capacity of non-Nato states including Ukraine, Georgia and Moldova to work with the United States and the Western alliance and build their own defences, the White House said.