The Defence Secretary has said he predicts talks between the Afghan government and Taliban will begin "in the coming months".
The Defence Secretary has pledged an extra £350 million-worth of trident funding - meaning £700m has been spent on the project this year.
Six British ships and 3,000 UK military personnel take part in Exercise Corsican Lion to develop the Franco-British joint naval force.
The Defence Secretary came out fighting for his department today, provoking open splits in the coalition over further spending cuts. Philip Hammond warned the capability of the armed forces is at risk and cuts to welfare would be more appropriate.
ITV News' political correspondent Romilly Weeks reports:
Former defence secretary Liam Fox has endorsed his successor Philip Hammond's call to protect the armed forces from further spending cuts.
We can't cut spending on our nat security while still spending big on discretionary domestic programmes. Security is first priority of Govt.From @LiamFoxMP on Twitter:
Defence Secretary Philip Hammond spoke out against prospective cuts to the armed forces following comments by Lib Dem ministers Danny Alexander and Vince Cable, a Whitehall source has said.
Their calls for welfare to be protected and defence to be cut apparently prompted their Conservative Cabinet colleague to go public.
"There is a real concern that the Lib Dems wants to protect the benefits culture at the expense of the armed forces," the source said.
Jim Murphy MP, Labour's Shadow Defence Secretary, has responded to Philip Hammond's comments on the Ministry of Defence budget.
"There is a gulf between the Government's rhetoric and reality.
"The country now has an aircraft carrier with no planes to fly from for years as well as the smallest army since the Boer War.
"Even then Defence Secretary has failed to balance the defence budget. We will judge the Defence Secretary on the cold reality of his actions rather than today's warm words."
Tory backbencher Mark Pritchard has said that Philip Hammond could expect strong support from Conservative MPs over his stance to curb cuts to defence.
"Defence cuts have gone far enough," he said.
"There will be zero political support from Conservative backbenchers for any additional cuts beyond those already announced in the SDSR.
"The Treasury needs to look elsewhere for additional savings."
Former Liberal Democrat leader Sir Menzies Campbell has welcomed Philip Hammond's views on cuts to defence:
– Sir Menzies Campbell
At last a defence secretary has publicly recognised that the long-running drip drip reduction in defence spending has materially eroded capability and seriously restricted the military options open to a British prime minister.
The truth is that our publicly stated ambitions now significantly exceed our capacity.
Philip Hammond has told the BBC that he will not be able to make further cuts "without eroding military capability."
– Philip Hammond
We won't be able to make further cuts without eroding military capability.
Of course I understand the Chancellor's challenge. He has to find additional savings in order to consolidate the public finances as we have to do but we need to look broadly across government at how we are going to do that, not just narrowly at a few departments.
The leader of a prominent defence and security think thank has said that the approach to defence cuts is one of risk analysis.
Speaking to BBC Breakfast, Professor Michael Clarke, director-general of the Royal United Services Institute, said:
– Professor Michael Clarke
It's all a matter of risk analysis. If you don't think that the Armed Forces will be doing as much in the next five to eight years once Afghanistan is in the rear-view mirror then you might take that risk.
The Armed Forces have been continuously in operation since 1991 when the Cold War came to an end so it would be a bit optimistic to think that that process which has gone on now for over 20 years would suddenly stop once we withdraw from Afghanistan.
Philip Hammond has said that Nick Clegg does not view defence as an important area.
In an interview with the Daily Telegraph, the Secretary of State for Defence, said:
– Philip Hammond, Secretary of State for Defence
I am a Conservative. The kind of Conservatism I was brought up on says that the first priority of the government is defending the country and maintaining law and order.
Those are the two top priorities for me.
We’ve got no Lib Dems, because, apparently, Nick Clegg doesn’t regard defence as an important area.
Defence Secretary Philip Hammond said there was a "body of opinion within Cabinet who believes that we have to look at the welfare budget again", and that "we should be seeing welfare spending falling" as a result of rising employment levels.
He said the "first priority" for the Government should be "defending the country and maintaining law and order" and that further defence cuts were not possible while meeting stated security objectives.
– Defence Secretary Philip Hammond
I shall go into the spending review fighting the case for the defence budget on the basis that we have made very large cuts to defence, we've done that with the collaboration and co-operation of the military.
Any further reduction in the defence budget would fall on the level of activity that we were able to carry out - the idea that expensively bought equipment may not be able to be used, expensively employed troops may not be able to be exercised and trained as regularly as they need to be.
I am not going into the spending review offering any further reductions in personnel.