The United States signed a pact on Tuesday to build part of a U.S. missile defence shield in the Czech Republic, prompting neighbouring Russia to warn it will react with military means if the shield is deployed.

The U.S. and Czech foreign ministers toasted with champagne after signing the accord to place a tracking radar southwest of Prague as part of a system to protect against the perceived threat of missile attack from countries such as Iran.

But Russia, in a statement reminiscent of Cold War rhetoric, warned the United States against deploying the shield close to its borders.

"If the real deployment of an American strategic missile defence shield begins close to our borders, then we will be forced to react not with diplomatic methods, but with military-technical methods," the Foreign Ministry said in a statement on its www.mid.ru website.

It did not give specifics but analysts said the threat appeared aimed at stoking European opposition to the shield.

In response, the Pentagon accused Moscow of trying to make Washington's European allies nervous with its aggressive talk.

"I can only assume Russia's bellicose rhetoric is designed to make Europeans nervous about participating in this system, but that won't work," said press secretary Geoff Morrell.

Still, the White House said it would keep talking to Russia, trying to explain that the missile shield was not aimed against Moscow.

After President George W. Bush met Russian President Dmitry Medvedev on the fringes of the G8 summit, in Japan, White House spokesman Gordon Johndroe said: "We will continue to have a dialogue with the Russians on this matter as Presidents Bush and Medvedev reaffirmed this week in their meeting in Japan."

In 2007, former President Vladimir Putin, now prime minister, said Russia could aim missiles at European countries if the missile shield, which Moscow considers a threat to its national security, goes ahead.

The Pentagon insists the missile defence system is designed to counter missile threats from the Middle East, not Russia.

"We've made several very robust offers to the Russians in terms of how we could collaborate and how we are willing to have as much transparency as possible with respect to this missile defence system, what its design is and what its intent is," Pentagon spokesman Bryan Whitman told Reuters Tuesday.

Russia's Foreign Ministry said in the statement Moscow's proposals to the United States on the shield had been ignored.

Washington also wants to put 10 interceptor rockets in neighbouring Poland, although talks on that have stalled due to Polish demands for billions of dollars to modernize its army and air defences in return for hosting the missile base.

'ROGUE STATES'

The United States says the shield would defend itself and its allies against missile attacks from "rogue states" and points to intelligence suggesting Iran could develop a long-range missile capable of striking Europe by 2015.

"We face, with the Iranians, and so do our allies and friends, a growing missile threat that is getting ever longer and ever deeper, and where the Iranian appetite for nuclear technology, to this point, is still unchecked," U.S. Secretary of State Condoleezza Rice said after signing the deal.

Under the proposed $3.5 billion (1.78 billion pound) system, sensors and radar would detect an enemy missile in flight and guide a ground-based interceptor to destroy it without explosives.

The deal is opposed by many in the Czech Republic, where it requires parliamentary approval. Many Czechs are wary of any foreign military presence after the Soviet invasion in 1968 and ensuing two decades of occupation. An opinion poll last month showed 68 percent of Czechs were against the shield.

"We believe that this could start another arms race," said Frantisek Smrcka, who with other protesters in the Czech capital unfurled a huge banner shaped like a bull's-eye.

Russian military analyst Pavel Felgenhauer said Moscow was using Cold War rhetoric to discourage the Czech parliament from ratifying the shield agreement.

"That is why it is very unspecific but sounds threatening," he said. "It is psychological pressure, the same sort that was used in the 1980s by the Soviet Union when the United States deployed cruise missiles in Europe, in an attempt to boost the anti-missile, anti-U.S. protests."

Prague said it was surprised by Moscow's reaction.

"This is not an appropriate way to react. We would expect a different way, given negotiations that we but also our partners are leading with Russia," said Czech Foreign Ministry spokeswoman Zuzana Opletalova.

Russia, which has opposed the march of the NATO security alliance toward its borders, earlier suggested the deal called into question U.S.-Russian talks on missile defence cooperation.

Moscow and Washington had agreed to explore ways of easing the Kremlin's concerns the shield would be used to spy on and target Russia's own missile systems. Proposals under discussion had included stationing Russian military officers at the shield sites and providing real-time video of activity there.

The shield is a priority for Bush, who hopes to finalize an accord on the interceptors with Poland before he leaves office in January. After that, the system's fate will be decided by his successor.