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Finland has confirmed that it will apply for Nato membership, despite warnings from Russia's President Vladimir Putin that abandoning neutrality would be a "mistake".
President Sauli Niinisto called it a "historic day". He says the shift in policy is in response to Russia's invasion of Ukraine.
Nato foreign ministers say they want a rapid accession process for Finland.
Sweden could also announce its intention to join as soon as Monday.
Finland shares a 1,300-km (810-mile) border with Russia. Until now, it has stayed out of Nato to avoid antagonising its eastern neighbour.
On Saturday Mr Niinisto called Mr Putin to tell him of the Finnish decision and later said the call had been "direct and straight-forward" and "conducted without aggravations".
"Avoiding tensions was considered important," he said.
Announcing the decision in Helsinki on Sunday, he said he had wanted to "say it straight" to Mr Putin.
"I, or Finland, are not known to sneak around and quietly disappear behind a corner," he said.
Finland's parliament must now ratify the decision but Prime Minister Sanna Marin said she was confident MPs would debate the matter "with determination and responsibility".
Security guarantees
Foreign ministers of Nato countries, who are meeting in Berlin, have pledged to provide security guarantees for both Finland and Sweden while their bids to join Nato are being ratified by all member states - a process that can take up to a year
German Foreign Minister Annalena Baerbock said there could not be a "transition period, a grey zone, where their status is unclear".
Mr Putin has not made a specific threat over Finland's move, but the Russian foreign ministry has indicated there will be retaliation.
Russia's decision to suspended electricity supplies to Finland is being seen as an sign of what may come.
Finland says Russia provided about 10% of its electricity and it can replace this from alternative sources.
Meanwhile Nato's deputy chief said he was confident that the organisation could overcome Turkish objections to both Finland and Sweden's membership.
Turkey, a Nato member state, accuses both Nordic countries of having given support to the Kurdistan Workers Party (PKK), which has been waging an armed struggle against the Turkish government for decades.
President Recep Tayyip Erdogan accused both countries of harbouring "terrorist organisations".
But Mircea Geoana said Turkey's concerns had been expressed "between friends and allies" and could be addressed.
Mr Niinisto has said he is ready to hold talks with Mr Erdogan, Turkish media reported.
Both Sweden and Finland have Kurdish communities, and in Sweden's case some parliamentarians have Kurdish origins. President Erdogan did not provide any proof that these communities had links with the PKK.
Nato, a Western military alliance, was founded in 1949 to counter the threat from the Soviet Union,
President Putin has mentioned Ukraine's intention to join the alliance as one of the reasons for the invasion of its neighbour.