By Dmitry Solovyov

MOSCOW, Oct 13 (Reuters) - Russia test-fired two ballistic missiles and bombed a dummy town at the weekend, but analysts said the show of military preparedness was for domestic consumption and not a Kremlin warning shot to the West.

The exercises -- some overseen by President Dmitry Medvedev and all given extensive coverage on national television -- followed weeks of angry rhetoric between Russia and the United States over the August war in Georgia.

On Saturday, Medvedev watched the successful launch of a Sineva intercontinental missile from a submarine in the Arctic Barents Sea. It hit a virtual target near the Equator in the Pacific Ocean, the first flight at this range.

The next day, Medvedev inspected the Plesetsk military cosmodrome in the north-west of Russia where he watched the test-launch of a Topol nuclear-capable missile which hit a target on Russia's Pacific coast.

Over the course of the weekend, 12 Tu-160 and Tu-95MS strategic bombers took off for an exercise that involved launching multiple cruise missiles to pulverise a dummy town on a testing ground in the Arctic.

The scale and intensity of the exercises was unusual but they proved little to potential adversaries about Russia's military capability, said analyst Stanislav Belkovsky.

"The Kremlin staged this showy ... PR campaign to distract public attention from the financial crisis and tell the people, 'Look, we still have achievements in the military sector'," said Belkovsky, head of the National Strategy Institute think tank.

Russian stocks recorded their worst weekly performance for a decade last week and are now down 66 percent from their peak in May. The impact is slowly starting to filter through to the real economy, with some firms announcing lay-offs.

SABRE-RATTLING

"All we saw is technology that is 20 or 25 years old," Belkovsky said. "Military experts know the real state of things, so you can't fool them by this Soviet-era sabre-rattling."

The Topol missile had been in service for 21 years, while the Sineva was also designed in Soviet times.

In 2004, two Sineva missiles failed to take off in a submarine test-launch, embarrassing then President Vladimir Putin who was inspecting the exercise.

Vitaly Tsymbal, military analyst at the Moscow-based Institute of Transitional Period Economics, said the latest exercises may be linked to Russia's war with Georgia.

Russian forces easily crushed an attempt by Georgia's military to retake the breakaway South Ossetia region in August, but the campaign exposed shortcomings -- especially in air reconnaissance and hi-tech missiles.

Western states said Russia's actions in Georgia were disproportionate, dragging diplomatic relations between Washington and Moscow to a new post-Cold War low.

"After the August events, the military leadership wants to demonstrate to the president that there are weapons, they are in safe hands and it all can be launched if need be," Tsymbal said.

Putin, now a powerful prime minister, said earlier this month the government would allot an extra 80 billion roubles ($3.06 billion) next year to buy new weapons and partly offset Moscow's losses during the war in Georgia.

"A new budget is being discussed. If you need parliamentarians to boost military spending, you need to impress them first," Tsymbal said. (Reporting by Dmitry Solovyov; Editing by Ralph Boulton)

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