President Barack Obama on Thursday overhauled plans for a missile defense shield in eastern Europe, promising instead stronger, swifter defense systems to protect US allies against any threat from Iran.

In a move that may ease tensions with Moscow but spur regional fears of resurgent Kremlin influence, Obama said he had approved recommendations from US military leaders to shift focus to defending against Iran's short and medium-term missile capabilities.

"This new approach will provide capabilities sooner, build on proven systems and offer greater defenses against the threat of missile attack," Obama said in a brief statement on scrapping plans for ground-based interceptors in Poland and a related radar site in the Czech Republic.

Moscow said it would welcome the decision to drop the program, which had complicated US efforts to enlist Russian support over Afghanistan, Iran and nuclear arms control.

But critics accused the White House of going soft on defense by dropping the project, which had raised hopes of huge contracts among US defense giants.

Senator John McCain, the Republican presidential candidate who lost to Obama in 2008, blasted the move as "seriously misguided" and former US ambassador to the United Nations John Bolton, once a leading hawk under the Bush administration, was scathing.

"It's just unambiguously bad decision," he said. "Russia and Iran are the big winners. I just think it's a bad day for American national security."     The Bush administration had proposed the system amid concerns Iran was trying to develop nuclear warheads it could mount on long-range missiles.

The shield was intended to defend against any long-range missile launches from "rogue" states such as Iran and North Korea. Russia saw it as a threat to its missile defenses and its overall security.

Outlining the new approach, Defense Secretary Robert Gates said on Thursday the United States would deploy Aegis ships equipped with interceptors to defend European allies and US forces against any threats.

Gates said land-based defense systems would be fielded in a second phase starting in about 2015.

"We have now the opportunity to deploy new sensors and interceptors in northern and southern Europe that near term can provide missile defense coverage against more immediate threats from Iran or others," he said.

Shares of US companies involved in missile defense, including Boeing Co, Lockheed Martin Corp, Northrop Grumman Corp and Raytheon Co, were little changed in early trade on the New York Stock Exchange.

The decision had been widely anticipated, with the contractors likely to benefit from the administration's revised missile-defense plans.

It was unclear, however, if the renewed promises of US support would ease fears in Eastern Europe states, many of which had seen the large-scale missile plan as a symbol of US commitment to the defense against any encroachment by its former Soviet rulers 20 years after the end of communist rule.

Obama informed the Czech and Polish governments of his decision just hours before the announcement, officials said.

Some European analysts said the US move could help the traditionally pro-American region to build a more pragmatic relationship with both Washington and Moscow. - Reuters