CANBERRA, Aug. 24 (Xinhua): Australian Prime Minister, John Howard, on Thursday announced that the army will be enlarged by 2,600 personnel at a cost of 10 billion Australian dollars (7.6 billion US dollars).

The move will bring the number of the army to about 30,000. The announcement came two days after newspaper reports that Australia is to double its international police force to deal with regional hotspots.

Howard said the reason why the government decided to increase the size of the army is that Australia will face more challenging situations in the region.

"This country faces on-going, and in my opinion increasing, instances of destabilized and failing states in our own region," he told reporters here.

"I believe in the next 10 to 20 years Australia will face a number of situations the equivalent of, or potentially more challenging than, the Solomon Islands and East Timor," he said.

Howard said he made the assessment about Australia's military needs based on recent incidents in the region that showed the security situation was deteriorating.

The boosted army was designed to allow the government to act pre-emptively to stop problems in the region, he said.

Howard said two new battalions would be established in two stages, with one eventually to be based in Adelaide, capital of the State of South Australia, and the other in the southeast of the State of Queensland.

He said the first new battalion would be a mechanized unit and the other would be light infantry.

The first new battalion would be manned by 2008 and ready for overseas deployment by the end of 2010.

"This decision will ... as I understand it take us back to a situation where we have the largest number of infantry battalions since 1973," Howard said.

He said Defense Minister, Brendan Nelson, would be working closely on recruitment in the months to come.