The plan, for which the Pentagon has requested $56m (£30m) of exploratory funding from Congress, would cost $1.6bn and involve 10 interceptor units.
The most likely base for the system is Poland, followed by the Czech Republic, officials said. For the moment, the scheme first reported in The New York Times this week and which would parallel the anti-missile shield under construction in Alaska and California against attacks from North Korea is largely symbolic and hypothetical.
Iran currently has no weapons capable of hitting western Europe, let alone an intercontinental missile that could strike the United States. But as a showdown moves closer between the West and Tehran over its uranium-enrichment programme, and with the Israeli Prime Minister in Washington warning that Iran represents a threat not only to Israel but to Western civilisation, the US is determined to send another signal of its determination to act.
The new shield would bring a direct US military presence deeper into Europe. And for Russia, the project reeks of American encroachment into what used to be its own sphere of influence. The move would have "a negative impact on the whole Euro-Atlantic security system", Sergei Ivanov, the Russian Defence Minister, told a Belarus newspaper, hinting at further strain on ever-delicate relations between Russia and Nato. The mooted site for the system was "dubious, to put it mildly", he said.
This is not the first time the missile shield has divided the two countries.
In 2002, President Bush upset Moscow by unilaterally pulling out of the 1972 Anti-Ballistic Missile Treaty, long regarded in Moscow as the cornerstone of nuclear arms control.
The possible extension of missile defences into Poland or the Czech Republic both staunch American allies is the latest episode of a story that has inspired dreams and controversy in equal measure since it was first sketched out by President Ronald Reagan in 1983 as the Strategic Defence Initiative (SDI), quickly dubbed "Star Wars". But despite more than 20 years of work and tens of billions of dollars in spending, it is now accepted that any such shield would be overwhelmed by an attack from Russia, which possesses a nuclear arsenal comparable to the US.
It has now been scaled back to cope with the far more limited strike that North Korea might be able to deliver to the continental US by the end of the decade. So far, nine interceptor rockets are in place at Fort Greely in Alaska, and two more at Vandenberg Air Force Base in California. But the viability even of this version is questionable.
"It [the shield] has been doing very poorly," a former Pentagon official involved in the testing told The New York Times. "They have not had a successful flight intercept test in four years."
But the slow progress has not deterred extensive contacts between the US and Poland in particular. Polish press reports have said that Boeing, the lead company on the project, has already agreed to subcontract work to Polish concerns.
According to The New York Times, the Defence Secretary, Donald Rumsfeld, is expected to receive a recommendation on a European site in the summer. If the plan for interceptors in Poland goes ahead, it would create the first permanent American military presence in the country.
At least as logical a site for the shield would be Britain, where the Pentagon is already upgrading equipment at the early warning radar base of Fylingdales in North Yorkshire. But the intense domestic unpopularity of Tony Blair who is meeting President Bush in Washington tomorrow and hostility to the Iraq war have ruled that option out.
Poland, on the other hand, has been a staunch ally of the US ever since Communism collapsed there in 1989. It is now a member of Nato, and has contributed troops to the occupation of Iraq.