Ukraine does not demand an early pullout of Russia's Black Sea fleet from its port in Sevastopol.
Petro Poroshenko, head of the National Security and Defense Council, was quoted as saying that the two countries had agreed to base the Russian fleet at Sevastopol.
"The presence of Russian navy is regulated with a bilateral agreement, which Ukraine fulfills to the letter," Poroshenko was quoted as saying by the AP.
"That means that the (Black Sea) fleet stays until 2017," he was quoted as saying.
Russia and Ukraine divided up the Soviet Black Sea fleet after years of bitter arguments following the 1991 Soviet collapse, and the Russian navy was allowed to base its ships at Sevastopol.
Under the agreement, Russia pays for the anchorage, provides some equipment for the Ukrainian navy and maintains an airstrip used by naval pilots from both countries to practice carrier-borne takeoffs and landings.
Earlier this year, President Viktor Yushchenko criticized Russia's failure to deliver navigational equipment for the Ukrainian coast guard and harbor authorities in Sevastopol. As well, demands recently by some Ukrainian politicians for a review of the Russian fleet's status caused concern in Russia.
Yushchenko and Defense Minister Anatoly Gritsenko both have sought to dispel Russian concerns, assuring that Ukraine would honor its bilateral obligations.
Yushchenko on Monday pledged that the government would improve funding in the next year's state budget and would refurbish of the impoverished army and navy, many of whose vessels obsolete and rusting in their berths.
In comments in Sevastopol marking of anniversary of the Ukrainian fleet, Yushchenko suggested creating a five-year "modernization roadmap" to address problems of the 250,000-strong military.
He said he hopes that Ukrainian "shores will be a large bridge between free nations."
"The cooperation of Ukraine's navy with European and Euro-Atlantic partners is one of its key pillars," he said
Ukraine, which is a member of NATO's Partnership for Peace program, frequently hosts international military drills with troops from the United States and NATO member countries.
The Ukrainian military also announced recently it would send a ship to participate in a NATO-led anti-terrorist force that patrols the Mediterranean.
Russian President Vladimir Putin would never fall to the level of personal insults, Kremlin official spokesman Dmitry Peskov said