Anders Fogh Rasmussen, the Secretary General of NATO says Europe needs a new missile defense shield to protect itself against an Iranian nuclear threat.
The London Telegraph reported the concern comes after last week's warning by weapons inspectors from the International Atomic Energy Agency.
The IAEA said Iran will soon be able to arm ballistic missiles with nuclear warheads.
"Based on their public statements we know that Iran already has missiles with a range sufficient to hit targets in Europe, and they don't hide the fact that they want to further develop their capability," Rasmussen said.
"If Iran eventually acquires a nuclear capability that will be very dangerous, and a direct threat to the allies," he added. "That is the reason why I am now proposing a new and effective Nato missile defence system."
Rasmussen claimed that the new system could be set up in cooperation with Russia, which has opposed previous American attempts to set up missile shields in Europe. He said the U.S. is backing his proposal.
Europe's anti-missile defenses at present consists of interception missiles based on U.S. warships, which would track and attempt to shoot down missiles fired during an attack.