"Russia is holding military exercises in Kaliningrad, and its scenario includes deployment of Iskander missile systems and the possibile use of them. We are aware of it," Lithuanian Foreign Minister Linas Linkevicius told AFP.
He said modified Iskander missiles had a range of up to 700 kilometres which means they could reach German capital Berlin from the Russian exclave, which is sandwiched between Poland and Lithuania.
Linkevicius said that this time he thought Moscow was using the move to "seek concessions from the West".
Russia's defence ministry dismissed Western concerns over the hardware, saying that "contingents of missile troops have been moved many times and will continue to be moved to Kaliningrad region as part of a Russian armed forces training plan."
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Kaliningrad is "not an exception" to drills conducted across the country, spokesman Igor Konashenkov said in an emailed statement.
Estonian media reported on Friday that Russia was shipping Iskanders on a civilian vessel in the Baltic sea.
Linkevicius declined to comment on the details.
Tensions between Russia and the West have escalated to their worst level since the Cold War in recent years after Russia annexed Crimea from Ukraine and launched a military campaign in Syria.
Since the start of the Ukraine crisis in 2014, Russia has flexed its muscles with a series of war games involving tens of thousands of troops in areas bordering NATO Baltic states.
The United States yesterday called for Russia and Syria to be investigated for war crimes for the bombing of hospitals in Aleppo, and accused Moscow of trying to "interfere" with the American presidential election.