Russia to consider retaliation over missile shield

TOYAKO, Japan (Reuters) - Russia will consider how to retaliate over a planned U.S. missile shield but wants to continue talks on the issue with Washington, President Dmitry Medvedev said on Wednesday.

Washington and Prague signed a deal on Tuesday to place a tracking radar in the Czech Republic as part of a system the United States says is needed as protection against any missile attack from countries such as Iran.

Russia is sensitive to any Western military build-up near its borders and says it considers the U.S. missile shield plans a direct threat to its security.

"We are extremely upset by this situation," Medvedev told a news conference on the northern Japanese island of Hokkaido, where he was attending a summit of the Group of Eight leaders.

"We will not be hysterical about this but we will think of retaliatory steps," he said, but did not specify what retaliatory measures Russia might take.

His comments followed a harshly worded statement by Russia's Foreign Ministry that said Moscow would be forced to use unspecified "military-technical methods" if a U.S.-Czech deal was ratified. Washington called that statement "bellicose".

(Additional reporting by Arshad Mohammed in Sofia; Editing by Timothy Heritage)