WASHINGTON - President Barack Obama on Thursday dumped a Bush-era missile defense plan for Europe that Russia had bitterly opposed and offered what he said would be faster, more flexible defense systems to protect against Iran.

In a move that could spur fears of resurgent Kremlin influence, Obama said he had approved recommendations from U.S. military leaders to shift focus to defending against Iran's short- and medium-range missiles.

This new approach will provide capabilities sooner, build on proven systems and offer greater defenses against the threat of missile attack, Obama said, scrapping plans put in place by his White House predecessor George W. Bush for ground-based interceptors in Poland and a related radar site in the Czech Republic.

Under the new U.S. plan, missile interceptors would initially be placed on ships and land-based defense systems would be fielded in a second phase.

Russian President Dmitry Medvedev hailed the decision, which removed an issue clouding U.S. efforts to enlist Russian support on Afghanistan, Iran and nuclear arms control.

We value the U.S. president's responsible approach toward implementing our agreements, Medvedev said in an address shown on national television. I am ready to continue the dialogue.

But critics accused the White House of dangerous weakness. The Bush plans for the missile shield had raised hopes of huge contracts among U.S. defense giants, although analysts said weapons makers were still likely to profit.

Senator John McCain, the Republican presidential candidate who lost to Obama in 2008, blasted the move as seriously misguided and former U.S. ambassador to the United Nations John Bolton, a leading Bush-era hawk, was scathing.

It's just unambiguously a bad decision, Bolton said. Russia and Iran are the big winners. I just think it's a bad day for American national security.

The Bush administration had proposed the system amid concerns Iran was trying to develop nuclear warheads it could mount on long-range missiles. But Russia saw it as a threat to its own missile defenses and overall security.

THE NEW APPROACH

Outlining the new approach, Defense Secretary Robert Gates said the United States would deploy Aegis-equipped ships with interceptors capable of shooting down ballistic missiles to defend both European allies and U.S. forces.

Gates said land-based defense systems would be fielded in a second phase starting in about 2015.

Those who say we are scrapping missile defense in Europe are either misinformed or misrepresenting the reality of what we are doing, Gates said.

Marine Corps General James Cartwright, vice chairman of the Joint Chiefs of Staff, said the Pentagon also envisioned eventually deploying a land-based radar as part of the system which would ideally be based in the Caucasus.

Clearly it is a shift in the specific components of the missile defense system, the architecture of the missile defense system, but it continues our commitment to the security of Europe, State Department spokesman P.J. Crowley said.
Shares of U.S. companies involved in missile defense, including Boeing Co, Lockheed Martin Corp, Northrop Grumman Corp and Raytheon Co, were little changed in early trade on the New York Stock Exchange.

The decision had been widely anticipated, with the contractors also likely to benefit from the administration's revised missile-defense plans.

Analysts said investors could see some long-term trade and other benefits if the U.S. missile decision improves relations with Russia, but noted that there were also risks if Moscow ended up in taking a more assertive posture.

NO QUID PRO QUO

The move drew praise from Obama's fellow Democrats and some arms control advocates who saw the Bush plan as aimed at a Iranian missile threat that did not yet exist.

The Obama administration is restoring American credibility while protecting our national security and that of our allies by canceling a failed, ideologically driven program, said the pro-Obama National Security Network.

The White House rejected Republican charges it had made a major concession to Moscow without winning anything in return. This is not about Russia, White House spokesman Robert Gibbs said, adding there was no quid pro quo expected.

But other Democrats said they hoped for a pay-off on Iran policy where Russia is seen as a reluctant partner in efforts to end Tehran's nuclear program.

It is time for Russia to join our push to impose stricter sanctions on Iran, Democratic Senator Charles Schumer said.

Republicans -- who hope to build momentum against Obama after a summer dominated by angry debate over his healthcare reform plan -- wasted no time assigning blame.

The reported decision to scrap missile defense for Europe sounds dangerously like a policy of appeasement, Representative Ileana Ros-Lehtinen, the ranking Republican on the House Foreign Affairs Committee, said in a statement.

Such fears were likely to grow in eastern European states, many of which had seen the large missile plan as a symbol of U.S. commitment to the defense against any encroachment by its former Soviet rulers 20 years after the end of communist rule.

Obama informed the Czech and Polish governments of his decision just hours before the announcement, officials said. In Poland, Foreign Minister Radoslaw Sikorski said the United States would still go ahead with plans to station a battery of armed Patriot missiles on Polish soil.

Some European analysts said the U.S. move could help the traditionally pro-American region to build a more pragmatic relationship with both Washington and Moscow.

A senior Iranian government source said the move could signal a move away from what he called 'threats and confrontation' over Iran's nuclear program.

(Additional reporting by Jan Lopatka in Prague, Conor Sweeney in Moscow, Jim Wolf in Washington and Ross Colvin in Baghdad, Tim Hepher; Writing by Andrew Quinn; Editing by Patricia Wilson and Jackie Frank)

Poland Russia Afghanistan George W. Bush