6:09 a.m. July 9, 2008

WASHINGTON - Democratic presidential candidate Barack Obama called Iran a threat that should be contained with diplomacy and tighter sanctions Wednesday, and Republican John McCain? said Tehran's missile test proved the need for a missile defense shield in Europe.

The candidates, who will face off in the November election, used the event to underline their contrasting approaches to the Middle East, which has been supplanted as U.S. voters' No. 1 issue by the struggling economy.

"I think what this underscores is the need for us to create a kind of policy that is putting the burden on Iran to change behavior, and frankly we just have not been able to do that over the last several years," the Illinois senator said on CBS television's "Early Show."

Obama, who called Iran a "great threat" on ABC's "Good Morning America, said President Bush has not backed up confrontational rhetoric with economic sanctions. Obama cited reports indicating that U.S. exports to Iran have increased during Bush's years in office.

Advertisement McCain?, who has called Obama's willingness to meet with U.S. foes such as Iran naive, said the Iranian tests proved the need for a missile-defense shield in Europe.

"Working with our European and regional allies is the best way to meet the threat posed by Iran, not unilateral concessions that undermine multilateral diplomacy," McCain? said in a prepared statement.

The United States on Tuesday signed a pact to build part of the missile shield in the Czech Republic. The Bush administration also wants to install facilities in Poland, although talks have stalled.

These efforts have angered Russia, which has said it will respond militarily if a shield is deployed near its borders.

(Editing by Patricia Zengerle)

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