WASHINGTON, April 18 (Reuters) - The U.S. and its NATO allies must remain alert for signs Russian President Vladimir Putin could use a tactical nuclear weapon in a "managed" escalation of his war in Ukraine, the second-highest U.S. diplomat said on Tuesday.

Deputy Secretary of State Wendy Sherman issued the warning during the opening session of an annual NATO arms control conference that was being held in North America for the first time since its inception in 2004.

"We have all watched and worried that Vladimir Putin would use what he considers a non-strategic tactical nuclear weapon or use some demonstration effect to escalate, but in an managed risk escalation," Sherman said. "It is very critical to remain watchful of this."

Putin's March 25 announcement that Russia is preparing to station tactical nuclear weapons in neighboring Belarus "is his effort to use this threat in a managed way," Sherman said.

Tactical nuclear weapons are designed for battlefield gains or for use against limited military targets.

Putin denies having any intention of employing nuclear weapons in Ukraine, where his forces for months have been bogged down in fierce fighting that has been costly for both sides.

Belarus, which shares a border with Ukraine and NATO members Poland, Lithuania and Latvia, provided a staging ground for part of the Russian force that invaded Ukraine in February 2022 in a failed bid to overrun the country.

NATO Secretary General Jens Stoltenberg, who joined Sherman in opening the conference, called Putin's plan to place tactical nuclear weapons in Belarus part of a years-long pattern of "dangerous, irresponsible nuclear rhetoric" that intensified with "the brutalization of Ukraine."

The alliance, he said, is "monitoring very closely what they (Russia) are doing."

Sherman said the United States would continue to "downgrade" intelligence for sharing with NATO's other 30 members "so that everyone knows...where we stand."