The Czech Republic has agreed to host part of a U.S. missile defense system within its borders, despite serious opposition by its former Cold War master, Russia. Officials in Moscow say the project undermines, rather than improves, European energy security.

On Tuesday, Washington took the first of at least two steps: After meeting her Czech counterpart, Karel Schwarzenberg, in Prague, U.S. Secretary of State Condoleezza Rice announced Prague had agreed to host within its borders a radar unit, the brain of the planned missile defense system in the heart of Europe. Washington claims the missiles, which are to be stationed in Poland, will protect the United States and its allies in Europe against nuclear attacks from rogue states -- mainly Iran.

"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 ... is still unchecked," Rice told reporters in Prague after sipping champagne with Schwarzenberg to celebrate the deal.

That toast won't go down well in Moscow, however, where Russian officials over the past year have voiced loud objections to the system. Former Russian President Vladimir Putin has said the project would spark a new arms race in Europe, and his successor, Dmitry Medvedev, is known to share Putin's opinion regarding missile defense.

After meeting Bush on the sidelines of the Group of Eight summit in Hokkaido, Japan, Medvedev said Tuesday they had agreed on Iran, but "with respect to European affairs and this missile defense," there were still differences.

While Medvedev was cautious with his remarks for diplomatic reasons, officials in the Kremlin were much less so.

"A step has been taken ... which in our view has not added to security on the European continent. More than that, it has complicated problems of security," Interfax news agency quoted a senior Russian Foreign Ministry source as saying.

Russian officials have said the radar station is designed to spy on Russia, rather than track Iranian rockets, and the defense missiles stationed in Poland might one day be directed against Russia.

Washington has promised to alleviate Russia's concerns and include Moscow in the system as much as possible, with proposals having included stationing Russian officers at the sites to monitor them. Yet the recent U.S.-Czech deal torpedoes these efforts, the Kremlin argues.

"Even those half-hearted promises relating to confidence-building and monitoring measures which our American partners gave us have been in effect canceled out," the Russian source said, according to Interfax.

Russian government officials, of course, are mainly irritated by NATO's eastward expansion, to which the missile defense system is seen as a major tool.

Schwarzenberg, the Czech foreign minister, wouldn't even object to that.

"The Czech Republic can feel safe only if, on the one hand, it is anchored in the European society, economically as well as security-wise, (and) on the other hand, there's our relationship with NATO," he said.

The system still has hurdles to overcome. Despite lengthy negotiations, Washington has not yet managed to convince Poland to harbor U.S. missiles. The Polish public has opposed the system, but that shouldn't be an issue; after all, it hasn't been one for the Czech government, which ignored that seven out of 10 Czechs oppose the U.S. plans.

The real issue is cash: Poland wants billions of dollars in financial aid to update its military, money Washington hasn't been willing to commit just yet.

And there are more problems: Experts have raised doubts about the system's ability to perform under operating capabilities. It is estimated to cost between $3 billion and $4 billion, money that would be better spent elsewhere, critics say.

While the system has been one of the key projects of the administration of President George W. Bush, it also remains to be seen what happens once his successor takes over. Both Sen. John McCain and his rival, Sen. Barack Obama, might shelve the missile defense system if opposition to it remained that fierce.