Sources told the Sueddeutsche that Washington was concerned because Iran is developing a satellite program and argued that if Tehran can send satellites into space, it could probably fire intercontinental missiles.

The daily quoted a high-ranking US diplomat as saying that the Americans would like to develop a defensive missile network with Europeans but doubted whether a deal could be reached quickly by NATO.

Because of these concerns, Washington may pursue bilateral agreements with individual European countries for deployment in 2006 anti-ballistic systems in exchange for economic aid, the Sueddeutsche said.

The diplomat acknowledged that such an approach could lead to new tensions with some European countries following the rift over the US-led Iraq war, according to the report.

US defense policy specialist Benjamin Schreer of the German Institute for International and Security Affairs told the newspaper that Romania and Bulgaria could be the "first choices" for such agreements with the United States.

In Washington, State Department spokesman Richard Boucher said he had no new information regarding US discussions with allies about the possibility of developing a missile shield.

"Obviously, missile defense is important to us. We've been working on it. We've been cooperating with other governments around the world: Russia, Europeans and others," he said.

The US military last month unveiled an upgraded Patriot anti-missile system in South Korea designed to thwart a missile blitz from North Korea, whom it has accused along with Iran of developing nuclear weapons.

The UN's International Atomic Energy Agency (IAEA) has given Iran until the end of October to produce a detailed list of its nuclear-related equipment, cease uranium enrichment and sign an additional protocol to the nuclear Non-Proliferation Treaty (NPT) allowing tougher inspections.

A failure by Iran to meet the IAEA deadline could see it declared in violation of the NPT, leading to possible sanctions from the UN Security Council.

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