Russian President Vladimir Putin threw a curveball at President George W. Bush, offering to drop his opposition to the defense system if the United States used a radar in the former Soviet republic of Azerbaijan instead of planned installations in NATO allies Poland and the Czech Republic, reports CBS News chief White House correspondent Jim Axelrod.
Mr. Bush called the idea "interesting" and will discuss it with Putin at next month's U.S.-Russia summit.
Mr. Bush has proposed basing the radar in the Czech Republic and interceptor rockets in Poland, rousing Moscow's suspicions that a system built in its backyard had to be aimed at it. The United States insisted the shield was aimed at any potential nuclear threat from Iran, not Russia, but Moscow declared the explanation "insufficient" as recently as Wednesday night.
With the dispute flaring in recent days into Cold War-style rhetoric and threats from Moscow, Putin's proposal to put the system in Azerbaijan came as a surprise.
U.S. officials scrambled to react afterward, huddling hurriedly before trying to explain it to the press. Though outright acceptance of such an idea seemed unlikely, the White House clearly wanted to avoid further inflaming tensions with a needed ally by giving Putin's idea short shrift.
"I think President Putin wanted to de-escalate the tensions a little bit on this issue, and I think it was a useful thing that he did," Hadley told a few reporters.
Putin said the existing radar station, built during Soviet times, is rented by Russia under a continuing agreement between Russia and Azerbaijan.
He argued the benefits of his suggested substitute: An Azerbaijan-based system would cover all of Europe rather than just part of it, and destroyed missile debris would fall in the ocean rather than on land.
Appearing together before reporters, Mr. Bush spoke before Putin and did not mention the alternative presented by his Russian counterpart. He said only that Putin "made some interesting suggestions."
The two leaders agreed to discuss the issue further during two days of talks beginning July 1 in Kennebunkport, Maine, at the Bush family's oceanfront compound. Lower-level officials in both governments also plan to explore it.
"This will be a serious set of strategic discussions," Mr. Bush said. "This is a serious issue, and we want to make sure that we all understand each other's positions very clearly."
The Russian leader said the proposed relocation would alleviate Russia's concerns about a European missile shield. "This will make it unnecessary for us to place our offensive complexes along the border with Europe," Putin said.
He laid out several other conditions, as well:
"Then we will have no problem," the Russian leader said.
He also warned the United States not to proceed with building the system as planned while negotiations with Moscow take place.