Russia mulls action on missile shield

By Oleg Shchedrov

TOYAKO, Japan (Reuters) - Russia will consider how to retaliate over a planned U.S. missile shield but wants to continue talks on the issue with Washington, President Dmitry Medvedev said on Wednesday.

Washington and Prague signed a deal on Tuesday to place a tracking radar in the Czech Republic as part of a system the United States says is needed as protection against any missile attack from countries such as Iran.

Russia is sensitive to any Western military build-up near its borders and says it considers the U.S. missile shield plans a direct threat to its security.

"We are extremely upset by this situation," Medvedev told a news conference on the northern Japanese island of Hokkaido, where he was attending a summit of the Group of Eight leaders.

"We will not be hysterical about this but we will think of retaliatory steps," he said, but did not specify what measures Russia might take.

Previous president Vladimir Putin proposed to Washington and NATO last year to set up a joint system of early warning to trace any potential launch from the volatile South. Moscow offered use of a radar station it hires in ex-Soviet Azerbaijan.

"There has been no reaction," Medvedev said. "They are conducting sleepy talks with us and that means that the (U.S. shield) idea will be realised."

"It is completely obvious that, after the signing of the agreement, a new stage in implementing the idea of the missile shield has started," he added.