Putin said shared use of a radar station in Azerbaijan with the United States would ensure better protection against a possible Iranian missile threat than US plans for a missile shield in central Europe.

Putin told reporters that Moscow and Washington could jointly operate the Gabala Radar Station in Azerbaijan which is currently rented out to Russia.

The Russian leader, standing next to Bush while speaking to correspondents at the G8 summit in Heiligendamm in northern Germany, said he had cleared the offer with Ilham Aliyev, the president of Azerbaijan.

If the proposal was accepted by Washington, Russia would not need to retarget Europe in response to the US plan to station elements of a missile shield in Poland and the Czech Republic, Putin added.

"This will make it unnecessary for us to place our offensive complexes along the borders with Europe," Putin said.

He added that such an arrangement would provide security for all of Europe, rather than just parts of the continent.

Kremlin spokesman Dmitri Peskov said Russia was ready to "completely share" all technical data from the Gabala radar station with the US.

The solution offered by Putin would "lead to a substantial easing of tensions," said Peskov, adding: "Our concerns will disappear."

Strategic dialogue

Peskov said the US needed more time to study the pros and cons of the Russian offer.

"You would not expect any readiness to accept this immediately ... it is too complicated and sensitive," he said.

Bush did not respond to the offer but described his talks with Putin as "open and constructive.

"We will continue to talk about missile defense in the coming weeks," Bush said.

The US president told reporters he wanted a "constructive and strategic dialogue" with his Russian counterpart.

"(Putin) made an interesting suggestion," Bush said."Let's put these options on the table and get some experts to take a look at it."

The two leaders are set to meet for two days of talks beginning July 1 in Kennebunkport, Maine, at the Bush family's oceanfront home.