One tour group stood out among the mainly elderly guests crowded into the Radisson Hotel close to Riga's Old Town. It was not just that their breakfast plates in the vast restaurant were piled much higher than anyone else's, but that all 100-plus of them were dressed in US army camouflage.

The Americans were part of a US-led multinational force engaged in a large-scale military exercise in Latvia. More such groups can be expected in the months ahead as Nato ramps up its presence in an effort to reassure Latvia and other Baltic states nervous over Russia's actions in the Ukraine.

The US is calling on Nato members to increase defence spending by billions of pounds to revive the 28-member alliance in the face of a renewed threat from its oldest adversary.

With Russia and the Ukraine situation topping the agenda of a Nato foreign ministers meeting in Brussels on Tuesday and Wednesday, US defence officials want every Nato member to spend a minimum of 2% of GDP on defence. At present, according to Nato data, only four countries do: the US, Britain, Greece and Estonia.

"I think it's clearly the view at Nato that the Ukraine situation has been a game-changer," said Robert Bell, the US secretary of defence representative in Europe. When asked by the Guardian whether an Nato summit in Wales in the autumn was shaping up as one of the most important since the end of the cold war, he concurred.

The US has been pressing its European partners for years without much success to increase defence spending. Senior US and UK military staff are optimistic about the summit. "It should kickstart Nato," one of the British staff said.

"The US thinks this is its best chance for years," one of the officials said of the prospect of movement towards the 2% target.

The US and UK argument is that Russia has been modernising its military over the last decade and can now mobilise and deploy its forces faster than Nato until this year had realised. They argue that Nato needs to use the summit to send a message to Russia's president, Vladimir Putin, by making a commitment to increased spending.

Nato proved to be ineffectual in the face of the takeover of Crimea but the Baltic countries are potentially different. Latvia, Estonia and Lithuania are members of the alliance, part of the collective security umbrella that would require the others to go to their defence.

The US troops in Riga last week were part of Sabre Strike, the biggest military exercise in the Baltics this year. It had been planned before the Ukraine crisis but some countries volunteered either to join or to increase their troop contribution as a direct result of the Crimea takeover.

Among those participating was Finland, which is not a Nato member. Finnish public opinion has long been set against membership. Russian annexation of Crimea might change that. The Finnish defence minister, Carl Haglund, said last week: "I think the grounds for Nato membership are stronger than ever."

Sabre Strike involved 4,700 soldiers from 10 countries. They had air support, including three US Hercules planes landing on a former Soviet base that had fallen into disuse but is being renovated. There was also a US-led naval exercise in the Baltic Sea.

Russia, in response to the US-led exercises, retaliated with exercises of its own in the Baltic enclave of Kaliningrad, with 24 ships from its Baltic fleet on patrol. Nato reported that its air patrols were scrambled four times after 16 Russian military planes were spotted close to Latvian airspace.

Russian analysts argue that in spite of Crimea, Russia poses no threat to the west, its forces heavily outnumbered by Nato. But Nato does not see it like that. Various military exercises were already planned by the west for the Baltics over the remainder of the year. These are now likely to be ramped up, from a collection of western countries to full-blown Nato ones.

Brigadier-General George Schwartz, of the US National Guard, who was involved in Sabre Strike, said he had discussed with representatives of other nations involved in the exercise the shift from engagement in counter-insurgency to more conventional warfare. "We have all agreed that we need to refocus on more of our core competencies," Schwartz said.

The US under the Bush and Obama administrations had been pivoting towards the Pacific, expressing concern about the rapid growth of China. European security has now climbed back onto the agenda.

While Nato commanders may prefer the prospect of facing a conventional force again rather than fighting insurgents in Iraq and Afghanistan, the problem is that Putin in the Ukraine used covert tactics. US and UK military staff are already looking at counter-measures should Russia use similar tactics in the Baltic countries, which also have sizeable ethnic Russian populations.

Bell stressed that while Nato's conventional forces played a role in deterring Russia from going further during the Ukraine crisis, he recognised the role of covert warfare. "There is a new appreciation that Russia has acquired a very sophisticated capacity for what is being labelled asymmetric, unattributed aggression, which is a combination of political pressure, economic pressure, cyber, propaganda, special forces, surrogates, infiltrators, equipment provision."

Nato, he said, had to consider what would happen if such tactics were directed at member countries, and "this would be an important focus for review by Nato through the summer".