President Putin of Russia proposed using a radar site in Azerbaijan for a European missile defense system as a counteroffer to President Bush’s plan to base the system in Poland and the Czech Republic.

Mr. Bush called it “an interesting suggestion” and said America and Russia will quickly begin “a strategic dialogue” to pursue the idea as part of a system to defend Europe from a missile attack by Iran or any other “rogue” state.

Their remarks after a 45-minute meeting on the sidelines of the Group of Eight summit in Heiligendamm, Germany, may defuse some of the tension that arose in Europe because of Mr. Putin’s strong objections to the missile shield, which he said threatened to spark a new arms race. Mr. Putin indicated all the friction hasn’t been eased.

” We have an understanding about common threats,” Mr. Putin said. “But we have differences. The difference is ways and means in which we can overcome these threats.”

Mr. Putin’s proposal would put the radar warning and control system for the missile defense in Azerbaijan, which was part of the Soviet Union and which shares a 268-mile border with Iran. It would use an existing radar facility installed by the old Soviet government in Gabala, Azerbaijan, and be under the joint control of the U.S. and Russian military.

The Nuclear Threat Initiative, a nonprofit group based in Washington founded by Ted Turner and a former senator, Sam Nunn, says on its Web site that the Gabala facility “does not officially have the status of a Russian military facility, but continues to be operated by Russian military personnel.” Mr. Putin said Russia leases the base.

Azerbaijan is becoming an alternative energy hub for Europe and is the third-largest oil producer in the former Soviet Union. It opened oil and gas pipelines that circumvent Russia during the past year.

Mr. Putin said he talked yesterday to Azerbaijan’s President Aliyev and the latter’s agreement “makes it possible” for the U.S. and Russia now to “consider this.”

Mr. Bush’s plan would put the radar in the Czech Republic and the interceptor missiles in Poland. Asked if Mr. Putin still would accept putting the missiles in Poland, his spokesman, Dmitry Peskov, said it is “too early to try to consider the possible structure of the system.”

National Security Adviser Stephen Hadley said after the meeting that Mr. Bush’s response to Mr. Putin’s suggestion was, “Let’s put everything on the table.” Some combination of the two proposals may end up being the solution, he said.

The Azerbaijan radar plan “has some elements to it that we have heard before,” Mr. Hadley said. “The two men agreed that it was appropriate to have it looked at by technical experts.” The details of those meetings have yet to be worked out.

“It’s really too soon to say where this heads,” Mr. Hadley said. “I think also President Putin wanted to de-escalate the tensions a little bit on this issue.”

Russia may have been motivated by a desire to prevent the U.S. from integrating the European missile shield into its own national defense system, said Theodore Postol, an MIT physicist and weapons expert.

For the U.S., a sophisticated missile defense system with more global reach might be possible with radar based in the Czech Republic but not feasible if it’s farther away in Azerbaijan, he said.

“If the United States believes that it is truly building something to deal with Iran and the Middle East, then this should be no problem at all,” Mr. Postol, a former Pentagon adviser, said. “If there’s an ulterior motive, then they’ll stonewall.”

Mr. Putin suggested he has similar concerns.

“We hope that these consultations will not serve as cover, to cover some unilateral actions,” Mr. Putin said.