For several years Russia has appealed to work together to counter possible missile attacks from rogue states, proposing alternative sites in southern Russia and Azerbaijan. Washington, however, wouldn't pull back on building a shield in Eastern Europe, which Russia saw as a threat to its security.

Under the new missile defense plan, the US is going to deploy smaller land- and sea-based SM-3 interceptors that would defend against short and medium range missiles.

“Our intelligence community now assesses that the threat from Iran's short- and mid-range missile is developing more rapidly than we have previously projected, and that poses a more immediate threat to us,” US Defense Secretary Robert Gates commented on the change in US strategy.

Moscow, which earlier had warned that the policy of the Bush administration could have started a new arms race, now says there's a chance those fears could be laid to rest.

“I hope we will work together on effective measures against the risks of missile proliferation, measures which will take into account concerns of all parties and which will ensure equal security to all states in Europe,” President Medvedev said, welcoming the statement of his American counterpart.

Prime Minister Vladimir Putin, for his part, expressed hope Obama’s move will open a window for greater cooperation.

“I hope this correct and bold decision will be followed by others, including a complete cancellation of all restrictions on cooperation with Russia, the transfer of high technologies to Russia, and the stepping up of efforts to expand the World Trade Organization,” Putin said.

Many European leaders agree Obama's decision to quit the old plan will only add to global security.

“I strongly support the decision. I think it shows there's more trust developing between nuclear power nations,” British Prime Minister Gordon Brown said in response to the turn of events.

“I see today's decision as a hopeful signal for overcoming difficulties with Russia when it comes to uniform strategy to combat the threat of Iran together,” added German Chancellor Angela Merkel on September 18.

Details on how exactly the new American plan will work and what role Russia will play are yet to appear, but most agree it is a big step away from the controversial plans of the Bush administration and opens an all-new chapter in US-Russia relations.