Defense Secretary William S. Cohen attacked Germany's plans to cut military spending, warning today that a failure by America's leading allies to modernize their defenses could jeopardize the NATO alliance.

In a speech notable for its blunt criticism, Cohen told a gathering of German military commanders in Hamburg that the Western military alliance could not hope to survive if the gap in military capabilities continued to grow between the United States and its European allies.

The Kosovo war revealed embarrassing military weaknesses among European nations, particularly in the areas of transport, aerial reconnaissance and precision-guided munitions. Despite vows to rectify those shortcomings, many allied governments are reluctant to spend more money on defense in an era of tight budgets, high unemployment and no visible military threats.

Germany's military spending has slumped to 1.5 percent of its gross domestic product--the lowest in decades--placing Europe's largest and richest nation in the bottom tier of the alliance. Military spending accounts for 3 percent of the U.S. GDP. Chancellor Gerhard Schroeder wants to make further cuts over the next four years despite the opposition of Defense Minister Rudolf Scharping and senior military officers.

Cohen argued that unless Germany makes the investments needed to acquire the advanced technologies that have become an essential part of the U.S. armed forces, it could damage the alliance's ability to fight on the same battlefields.

Germany also faces a wrenching debate over how to transform its 330,000-member army of conscripts trained to defend German territory into a smaller, mobile military force that could be dispatched to distant areas of conflict. Until four years ago, Germany's constitution banned soldiers from being deployed beyond the nation's borders, but the country currently has troops serving in NATO-led peacekeeping missions in Bosnia and Kosovo.

"The decisions Germany makes in the next few months and years will have a profound and lasting impact on the capabilities, not only of this nation, but of the alliance as a whole," Cohen said. "Now more than ever, the alliance looks to German leadership to contribute to the capabilities necessary if we are to continue shaping peace and security into the next century."

Cohen's toughly worded speech came in advance of a meeting of NATO defense ministers at alliance headquarters in Brussels beginning Thursday at which Europe's efforts to forge a stronger defense identity will be a key point on the agenda.

Cohen emphasized that "we cannot afford the disparity of alliance capabilities we witnessed this spring" when the United States conducted half of all combat missions and two-thirds of all support sorties in the 78-day bombing campaign against Yugoslavia.

The Clinton administration contends Europeans must assume a greater share of the alliance's defense burden to defuse the arguments of American isolationists who say the United States should curtail its security commitments. Yet European officials say when their governments strive to take more responsibility for the continent's defense, the Americans become suspicious that such initiatives will undermine U.S. leadership.

Cohen said he understood the need for Europeans to discuss their future defense needs as part of a quest for a distinct identity that is "somewhat separate and apart from NATO." But he insisted that NATO must remain the dominant security organization that protects transatlantic interests.

"The reality is that there can be no separation," he said. "I prefer to say that NATO should have what I call a first option on any action that would be taken in the way of a military operation."

Germany, France, Britain and Italy--which field the largest military forces in Europe--hope to win agreement next week from the 15 leaders of the European Union to deploy a European crisis force of up to 60,000 troops for at least two years in volatile places such as Bosnia and Kosovo.

Those governments have sought to reassure Washington that an independent European intervention force is not designed to weaken NATO, but simply to be available to act in a future crisis that endangers their vital interests if the United States chooses not to become involved.

CAPTION: U.S. Defense Secretary William Cohen urges boost in allied spending.