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U.S. President Barack Obama leaves the Diplomatic Reception Room of the White House on Thursday after speaking about U.S. plans for missile defence. ((Charles Dharapak/Associated Press))

U.S. President Barack Obama said Thursday that he is shelving a plan that would have put a missile defence system in the Czech Republic and Poland.

Obama said the U.S. has chosen instead to move forward with an approach to missile defence in Europe that will use "proven" technologies and be based around new assessments of the missile threat posed by Iran.

"Because our approach will be phased and adaptive, we will retain the flexibility to adjust and enhance our defences as the threat and technology continue to evolve," Obama said.

U.S. Defence Secretary Robert Gates said the decision to abandon the Bush administration's plans for a land-based missile defence system in Eastern Europe came about because of a change in the U.S. perception of the threat posed by Iran.

Gates told reporters that U.S. intelligence has concluded that short- and medium-range missiles now pose a greater near-term threat than intercontinental ballistic missiles. Short- and medium-range missiles are "developing more rapidly than previously projected" in Iran, Gates said.

The new program is set to begin around 2011 and will focus on sea- and land-based missile interceptors. The system is also set to include a range of sensors in Europe to defend against ballistic missile threats from the Middle East, White House officials said.

Co-operation to continue with allies

"We will continue to work co-operatively with our close friends and allies, the Czech Republic and Poland, who had agreed to host elements of the previous program," Obama said.

In Prague, Czech Prime Minister Jan Fischer said that Obama had assured him that Washington still considers the Czech Republic among its closest allies.

Polish Prime Minister Donald Tusk said he had spoken to Obama about the cancellation, adding that the two countries are still involved in discussions on what they can do to enhance Poland's security.

The Bush administration proposed the shield, which would have put 10 interceptor missiles in Poland and a radar system in the Czech Republic.

The U.S. said the shield would act as a strategic tool that would counter threats from Iran and other rogue states in the Middle East. Russia objected, saying the plan would put U.S. interceptor rockets too close to its territory.

NATO said Thursday that the new U.S. missile defence plan has the potential to protect all of Europe if it's fully implemented.

Good news for Russia-U.S. relations

Russian President Dmitry Medvedev told Russian televsion that the Obama administration's decision to scrap the missile defence system in Europe was a "responsible move."

He said he and Obama had discussed the issue of missile proliferation in their meetings earlier this year in London and Moscow and had agreed to work together to reduce that risk.

"The announcement made today in Washington shows that the conditions for such work are not bad," he said.  

By scrapping the European component of the missile shield plan, the U.S. may be extending an olive branch to Russia. It's seeking Moscow's co-operation in fighting the Taliban in Afghanistan and in persuading Iran to abandon its nuclear ambitions.

With files from The Associated Press