Russia had angrily condemned the anti-missile radar facility being placed in the Czech Republic and missile interceptors in Poland under plans drawn up by Obama’s predecessor George W. Bush, threatening to deploy short-range missiles in NATO’s backyard in retaliation.

But as Putin hailed Obama’s decision to revamp the scheme, Russia’s Interfax news agency said Moscow would now bin the idea of putting Iskander missiles in its Kaliningrad enclave, next to Poland and Lithuania.

"The last decision by US President Barack Obama, which cancelled the plans to build missile defence facilities in Eastern Europe, brings us good thoughts," Putin said in televised remarks.

"And I hope very much that this correct and brave decision will be followed by others," he added.

In his announcement Thursday, Obama said he had decided to replace the shield with a more mobile system targeting Iranian short and medium-range missiles, initially with sea-based interceptors.

Putin said Obama’s shift should be followed by other measures from Washington to lift Soviet-era restrictions on the import of high technology to Russia and to help its WTO membership bid.

Ties between Moscow and the West have been slowly recovering since Obama took over at the White House, promising a "reset" in their relations.

In another sign of a growing thaw, NATO’s new secretary general, Anders Fogh Rasmussen, said the alliance would address Russian President Dmitry Medvedev’s ideas on a new Euro-Atlantic security arrangement as he delivered a keynote speech which reached out to Moscow.

"I believe that a NATO-Russia dialogue could provide real added value. We must all aim for a Euro-Atlantic security architecture in which Russia sees herself reflected," Rasmussen said.

The former Danish prime minister said it was in the interests of the alliance and Moscow to work together, and said the US, NATO and Russia should consider linking missile defence systems.

Studying how to tackle the proliferation of ballistic missile technology is in "NATO’s and Russia’s fundamental strategic interest," he said.

"We should explore the potential for linking the US, NATO and Russia missile defence systems at an appropriate time," he added.

Rasmussen said it was time for a joint review with Russia of the security challenges of the 21st century.

"I would like to see NATO and Russia agree to carry out a joint review of the new 21st century security challenges to serve as a firm basis for our future cooperation," he said.

Moscow’s envoy to NATO Dmitry Rogozin called the address "very positive and very constructive," but added that it needed careful scrutiny.

In the wake of the missile system announcement, Russian newspapers said that it could herald the start of a new era of detente.

"This historic declaration could mark a new stage in Russian-US relations," the daily Vremya Novostei wrote.

The Kommersant daily said that Obama’s decision removed "one of the main irritants" in the Russian-US relationship.

As Polish and Czech leaders insisted that ties with the United States would remain strong after the announcement, other European heads of state hoped it would lead to a warming of ties between Russia and the West.

Speaking late Thursday at an EU summit, German Chancellor Angela Merkel called it "a sign of hope to get over difficulties with Russia" while French President Nicolas Sarkozy described it as "an excellent decision from every point of view."

AFP/Expatica