Russia Warns of Retaliation After Prague Signs Us 'star Wars' Pact

Dmitry Medvedev today warned Russia may take retaliatory steps after being "extremely upset" by a US defence pact with the Czech Republic.

The Russian president reacted angrily yesterday after the Bush administration capped a five-year campaign to extend its controversial "star wars" missile shield project from the US to Europe by signing a deal to build a radar station south of Prague.

The first formal agreement between the US and central Europe on the defence scheme instantly prompted threats from Moscow that it would retaliate militarily if the agreement is ratified.

Speaking at a news conference at the G8 summit in Japan, Medvedev said Russia was still open to talks with the US.

"We will not be hysterical about this but we will think of retaliatory steps ... We are not closed to further negotiations and we will continue these.

"It is completely obvious that, after the signing of the agreement a new stage in implementing the idea of the missile shield has started. We are extremely upset by this situation".

Poland is insistent on getting batteries of US Patriot missiles in return for deploying the shield's interceptor rockets in the north of the country, and this may still upset White House hopes of finalizing the project before George Bush steps down.

The Russian foreign ministry warned yesterday that the Kremlin would react "not diplomatically, but with military-technical means" if the agreement in Prague came into effect.

Condoleezza Rice, the US secretary of state, traveled to Prague for the signing ceremony of the radar station, sited at a derelict former Red Army base south of the capital. The radars aim to track ballistic missile launches from Iran, although Tehran does not possess such firepower.

"Ballistic missile proliferation is not an imaginary threat," Rice said.

The Bush administration is in a hurry to conclude deals on the $3.5bn (£1.75bn) project to extend the missile shield system from California and Alaska to Europe. But Rice had to abandon plans to travel on to Warsaw to complete the pact because of Polish concerns that the siting of 10 interceptor rockets underground in northern Poland would undermine rather than enhance Polish security. "We are at a place where these negotiations need to come to a conclusion," Rice said.

The Russian foreign ministry said last night the deal in Prague would "complicate" European security and subvert talks between Moscow and Washington on the dispute.

The Poles do not feel threatened by Iran, but are permanently wary of Russia. They are demanding US security guarantees such as Patriot missiles to shore up their defenses against short and medium-range missile attack. The US has balked, not least for fear of increasing Russian hostility to the project. "It is extremely important that Patriots are stationed in Poland," said the Polish defence minister, Bogdan Klich.

"The fundamental issue is in what way the American installations are going to be protected from an eventual missile attack, and in what way Poland is going to be protected from an eventual ballistic missile attack," he told TVN24 television. The US has offered to put Patriots in Poland for a year. Rice said yesterday she had told the Poles what the US "cannot do".

Radek Sikorski, the Polish foreign minister, went to Washington for last-ditch talks aimed at salvaging an agreement and preventing the collapse of talks that have been going on since 2003.

The Americans want to start building the facilities next year, ready by 2012. But public opinion is against the project in both Poland and the Czech Republic and the plans for the missile shield, the effectiveness of which remains unproven, could yet unravel. The government in Prague will struggle to get the radar deal through parliament while the Czechs and the Americans have yet to agree on the legal status of US troops in the country.