NATO's new chief hailed the move as "a positive step" and a Russian analyst said Obama's decision will increase the chances that Russia will cooperate more closely with the United States in the dispute over Iran's nuclear program.
Ex-leaders in the Czech Republic and Poland bristled at Obama's reversal, saying it reinforced a growing impression that Washington no longer views the region as indispensable to U.S. and European security interests. Yet many ordinary citizens who had been skeptical of the shield's benefits expressed relief that the system wouldn't be built on their soil.
"It is a big victory for the Czech Republic. We are happy that we will be able to continue to live in our beautiful country without the presence of foreign soldiers," said Jan Tamas, an activist who had organized numerous protests.
Jiri Paroubek, chairman of the Czech Republic's Social Democrats and a major missile defense opponent, also called it "excellent news."
The two countries' governments had endorsed the plan to put 10 interceptor rockets in Poland and a radar system in the Czech Republic. The Bush administration had pitched the system as a strategic defense to counter a perceived threat from Iran.
But the U.S. plan had deeply angered Russia, which expressed outrage that missiles would be stationed so close to its borders, and many Czechs and Poles felt caught in the middle of escalating tensions between Washington and Moscow.
Prime Minister Jan Fischer announced Thursday that Obama phoned him overnight to say that "his government is pulling out of plans to build a missile defense radar on Czech territory."
Fischer told reporters that Obama assured him that the "strategic cooperation" between the Czech Republic and the U.S. would continue, and that Washington considers the Czechs among its closest allies.
Thursday's decision is another sign that "the Americans are not interested in this territory as they were before," said Mirek Topolanek, a former Czech prime minister whose government signed treaties with the United States to set up the shield.
"It's not good," said former Polish president and Solidarity leader Lech Walesa.
"I can see what kind of policy the Obama administration is pursuing towards this part of Europe," Walesa said. "The way we are being approached needs to change."
Aleksander Szczyglo, head of Poland's National Security Office, characterized the change as a "defeat primarily of American long-distance thinking about the situation in this part of Europe."
Czech Foreign Minister Jan Kohout said "we were assured" that the U.S. was taking steps that should "improve security of NATO members, including the Czech Republic."
In Brussels, NATO Secretary-General Anders Fogh Rasmussen said talked with the top American envoy to the alliance on Thursday about the changes to the missile defense plan and all NATO members would be briefed later in the day.
"It is my clear impression that the American plan on missile defense will involve NATO .... to a higher degree in the future," Fogh Rasmussen told reporters. "This is a positive step in the direction of an inclusive and transparent process, which I also think is in the interest of ... the NATO alliance."
Russia was livid over the prospect of having U.S. interceptor rockets in countries so close to its territory, and the Obama administration has sought to improve strained ties with the Kremlin.
"The U.S. president's decision is a well-thought out and systematic one," said Konstantin Kosachev, head of the foreign affairs committee in the State Duma, the lower house of the Russian parliament. "It reflects understanding that any security measure can't be built entirely on the basis of one nation."
"Now we can talk about restoration of the strategic partnership between Russia and the United States," Kosachev added.
Alexei Arbatov, head of the Russian Academy of Science's Center for International Security, told a Moscow radio station on Thursday that the U.S. was giving in on missile defense to get more cooperation from Russia on Iran.
"The United States is reckoning that by rejecting the missile-defense system or putting it off to the far future, Russia will be inclined together with the United States to take a harder line on sanctions against Iran," he said.
Fischer said that after a review of the missile defense system, the U.S. now considers the threat of an attack using short- and mid-range missiles greater than one using long-range rockets.
"That's what the Americans assessed as the most serious threat," and Obama's decision was based on that, he said.
Obama took office undecided about the European system and said he would study it. His administration never sounded enthusiastic about it.
In a major foreign policy speech in April in Prague, Obama said Washington would proceed with developing the system as long as Iran posed a threat to U.S. and European security. But a top military leader, Marine Gen. James Cartwright, recently suggested that the U.S. may have underestimated how long it would take Iran to develop long-range missiles.
The Czech government had stood behind the planned radar system despite fierce opposition from the public. Critics feared the country would be targeted by terrorists if it agreed to host the radar system, which was planned for the Brdy military installation 90 kilometers (55 miles) southwest of Prague, the capital.
The decision to scrap the plan will have future consequences for U.S. relations with eastern Europe.
"If the administration approaches us in the future with any request, I would be strongly against it," said Jan Vidim, a lawmaker with Czech Republic's conservative Civic Democratic Party, which supported the plan.
Kole reported from Vienna. AP Writer Monika Scislowska in Warsaw and Jim Heintz in Moscow contributed to this story.