Nasdaq Stock Market Inc. struck a complex deal to sell a 20 percent stake to the state-owned Borse Dubai in return for control of Sweden's leading stock market, but the plan met with some questions from U.S. politicians concerned it would raise security issues.

The sale of the Nasdaq stake is part of a flurry of cross-border handshaking unveiled Thursday that holds potential to remake the already shifting landscape of global stock exchanges.

If enacted, the Nasdaq deal would let the exchange meet a long-held goal of planting a flag overseas as its larger rival, the New York Stock Exchange, did this year with the acquisition of Paris-based Euronext.

Nasdaq's plan would allow it to sidestep a further bidding war with cash-rich Borse Dubai for Sweden's OMX while Dubai gains footholds in both Nasdaq and the London Stock Exchange. Nasdaq Stock Market Inc. would pay Dubai 11.4 billion kronor ($1.72 billion) in cash. Borse Dubai would get a 19.99 percent stake in Nasdaq and two of 16 board seats in combined Nasdaq-OMX. Borse Dubai's voting rights would be limited to 5 percent, however, perhaps to help assuage concerns that a Middle Eastern government would for the first time own a sizable chunk of a U.S. exchange.

Nasdaq plans to use proceeds from the deal to pay down debt and repurchase stock.

But a potential complication arose only hours later when a group from Qatar said it become the largest stakeholder in the London exchange. Qatar has shown interest in OMX and could perhaps try to spoil Borse Dubai's bid for that exchange.

If Qatar doesn't try to disrupt the deal, two state-owned investment vehicles could in total control nearly half of the 300-year-old LSE, Europe's largest exchange.

The transactions are subject to approval by shareholders and regulators in Europe and the United States. Nasdaq and Borse Dubai said the agreements had unanimous support on both boards.

Political scrutiny could further complicate the desires of the acquisitive exchanges.

U.S. Sen. Charles E. Schumer, D-N.Y., chairman of the Joint Economic Committee and a senior member of the Senate Banking Committee, expressed doubts about the deal, saying "at this early stage this deal gives me pause." Schumer sent a letter to the Treasury Department seeking a review of the deal.

However, President Bush told reporters at a wide-ranging news conference in Washington that he was concerned protectionism would hamper economic growth.

"We're going to take a good look at it, as to whether or not it has any national security implications involved in the transaction. And I'm comfortable with the process to go forward," Bush said.

House Speaker Nancy Pelosi, D-Calif., said while she would want to learn more about the deal, the Nasdaq plan didn't appear to raise the same concerns as an effort 18 months ago by a Dubai state-owned company to purchase operating rights at six U.S. ports.

That proposal touched off a firestorm of protest in Congress, which ultimately squelched the deal. In the aftermath of the controversy, Washington passed a law requiring that investments by foreign state-owned companies undergo an additional 45-day investigation by government officials, on top of a standard 30-day review.

Legal experts said the transaction will face scrutiny by U.S. government agencies and on Capitol Hill, though it's too early to tell whether steps will be taken to scuttle the deal.

Ronald Meltzer, an attorney at law firm WilmerHale, said political concerns about the Dubai firm's investment are likely due as much to the company's Middle East location as any innate security concerns about the deal.

But Nasdaq Chief Executive Bob Greifeld said the initial reception to its plans had been a warm one.

"We've had some outreach with politicians today and the response has been very favorable," he said on a conference call.

Nasdaq said it would submit the deal to the federal Committee on Foreign Investment, or CFIUS, which reviews acquisitions of American companies by foreign entities for security concerns.

Greifeld told reporters in Stockholm he believed the U.S. Securities and Exchange Commission would be "positive" toward the agreement.

"It's a good transaction for the U.S. capital markets system and it will make sure that Nasdaq is a key player in the global consolidation," he said. "It's our job to communicate that to legislators and regulators and clearly."

But beyond any political headwind in the United States, the latest round of global dealmaking only furthers a rapid consolidation among the world's exchanges as the rise of electronic trading threatens to further squeeze profit margins.

The multilayered Nasdaq plan would allow it to buy OMX from Borse Dubai and, in turn, sell the bulk of its holdings in the LSE to Borse Dubai. Nasdaq said it would sell the LSE stake after failing to take over the exchange. Still wanting a footprint overseas, Nasdaq turned its focus to OMX, which operates stock and derivatives exchanges in Sweden, Denmark, Iceland, Finland and in the Baltic countries of Estonia, Latvia and Lithuania.

Analysts cautioned that the Qatar Investment Authority, which bought 20 percent of the London exchange, could try to disrupt the bid from Dubai, a city-state within the United Arab Emirates.

Dubai has been an aggressive suitor of businesses and tourists as it seeks to diversify its economy beyond its oil wealth, which has helped bankroll a huge boom in business and tourism.

Cubillas Ding, a senior analyst at Celent in London, said Borse Dubai could harbor ambitions of setting up an entity that would eventually hold a group of global exchanges akin to the marriage that combined the NYSE with the exchanges of Euronext.

"It's hard for me to see what really, strategically, they're trying to do," he said. "They have the money but whether the thinking behind it is clear I'm not so sure. The exchange landscape is going through quite an uncertain period. They're coming under price pressures."

The LSE, which has fought off a multitude of bids in the past few years, had no immediate comment on the Nasdaq-Borse Dubai deal, but said it welcomed the purchase of a stake by the government of Qatar.