European leaders welcomed Thursday a US decision to drop plans to extend its anti-missile shield into the continent, amid hope that the move could help improve strained ties with Russia.

Russia itself welcomed the step, while Poland and the Czech Republic -- where parts of the shield were to be based -- put on a brave face, saying the decision did not signal any deterioration in ties with Washington.

Russian President Dmitry Medvedev, whose country had threatened to deploy missiles of its own to counter the shield if construction went ahead in its neighbourhood, hailed the move.

"I am ready to continue dialogue," he said, adding that "Washington's declaration today shows that there are good conditions" on the ground for joint anti-missile action.

He vowed to work with US and European allies "to develop efficient measures against the growing risk posed by missiles; measures that take account the interests and concerns of all and ensure equal security for all states in the European area."

Germany saw the move as a sign of hope for improved NATO relations with Moscow, frozen after Russia sent troops into Georgia last year and further damaged by its decision to recognise two breakaway Georgian regions.

"I believe that this decision today is a sign of hope to get over difficulties with Russia," German Chancellor Angela Merkel, whose country has been a strong supporter of Moscow, told reporters in Brussels.

With her at a European Union summit, French President Nicolas Sarkozy described it as "an excellent decision from every point of view and I hope that our Russian friends will attach importance to this decision."

The previous US administration under president George W. Bush wanted to extend the massive and costly defence shield into Europe to counter a perceived missile threat from Iran.

It had planned to place 10 interceptors in Poland and link them to a radar in the Czech Republic. The move deeply angered Russia, which saw it as a threat to its own security.

Despite the decision's impact on their security, Polish and Czech leaders insisted that ties with the United States and US President Barack Obama would remain strong.

"I received President Obama's words and declarations with great satisfaction," Polish Prime Minister Donald Tusk said following telephone talks with Obama.

"The words I've heard from President Barack Obama -- after the change in the decision on the matter of the missile shield -- Poland has the opportunity to gain an exclusive position," Tusk said.

In an effort to reassure his allies, Obama said the new US approach to build a more mobile system targeting Iranian short-range and medium-range missiles initially using sea-based interceptors, would make them safer more quickly.

"I wouldn't say it is a failure of Poland, I will also say that because where we are geographically, we'll always have to work on our security," Tusk said, underscoring his nation's proximity to Russia.

Czech President Vaclav Klaus also brushed off any concerns about damage to relations with the United States.

"This decision of the American government did not come as a surprise to those who closely followed the signals over recent months," he said in Prague.

"I'm 100 percent convinced that this decision of the American government does not signal a cooling of relations between the United States and the Czech Republic," Klaus said.

Aware of the sensitivities of these two NATO allies about the US move, NATO Secretary General Anders Fogh Rasmussen pointedly declined to welcome the decision, but did thank Washington for consulting its alliance partners.

"The secretary general welcomes the fact that the United States has had this discussion today with its allies on missile defence for Europe that can include all allies and protect all allies," said his spokesman James Appathurai.

Across Brussels at the EU summit, British Prime Minister Gordon Brown gave full backing to the US move, saying it was a boost for efforts to stop weapons proliferation.

"I strongly support the decision that has been taken by President Obama today," he said. "Non proliferation remains a very high priority for the United Kingdom."

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