From: Reuters
Published April 21, 2008 09:38 AM

Arab nations non-committal on Iraq debt, embassies

By Mohammed Abbas and Sue Pleming

MANAMA (Reuters) - U.S. Secretary of State Condoleezza Rice received no firm commitments on debt relief for Iraq or greater Arab diplomatic representation in Baghdad after a meeting of Arab states on Monday.

But she said after a conference of the Gulf Cooperation Council plus Jordan and Egypt that Iraq would now routinely attend Gulf Arab meetings, which signaled Baghdad's "reintegration" into regional politics after the U.S.-led invasion in 2003.

Iraqi Foreign Minister Hoshiyar Zebari warmly embraced his Saudi counterpart as he entered the Bahrain meeting and said the atmosphere among neighbors had improved.

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"A number of countries around the table talked about their desire of having permanent representation in Iraq. The necessary arrangements would need to be made," Rice told a news conference

"I do believe that it's a process which will move forward."

Rice said last week she wants Arab states to shield Iraq from Iran's "nefarious influences."

Iraq is a mostly Arab nation while Iran's roots are Persian. Both countries, however, have majority Shi'ite populations.

Washington, which accuses Iran of stoking violence in Iraq, has long urged Sunni Arab states to beef up embassies in Baghdad as a sign of support for the Shi'ite-led government.

Several Arab states have promised to reopen their embassies and say delays are logistical not political, but Zebari said it was possible to operate in Iraq despite the violence.

"I think the atmosphere is much better and we have positive commitments from Saudi Arabia, the United Arab Emirates, Bahrain, Kuwait and Egypt to reopen their embassies, to name ambassadors," he told Reuters in Bahrain.

"Regarding the danger, we now have over 45 foreign missions working under difficult conditions but it is doable."

Egypt, whose ambassador to Iraq was killed there in 2005, has said it will not send an envoy until security improves. Many Arab diplomats have stayed away since a suicide car bomber attacked the Jordanian embassy in 2003, killing 17 people.

FOREIGN DEBT

Zebari also urged Arab countries to forgive their share of Iraq's outstanding foreign debt, saying the issue would be raised at a meeting of Iraq's neighbors in Kuwait on Tuesday.

Rice will join Arab nations and other G8 countries for the meeting in Kuwait which will back Iraq's drive to disarm militias and urge more embassies to open in Iraq, according to a draft of the final communique obtained by Reuters.

Rice has said she will push hard for Arab neighbors to "meet their obligations" and step up financial and diplomatic support that has not been forthcoming since the 2003 invasion.

She declined to give details on debt relief plans on Monday.

About $66.5 billion of Iraq's debt has been forgiven, with the bulk of that by the Paris Club members, according to State Department estimates this month. Of $56 billion to $80 billion of the estimated remaining debt, more than half is owed to Gulf countries, the department said.

"Debt relief is a standard request for Iraq. The foreign non-Arab countries have forgiven Iraq its debts so, of course, Iraq will expect from its brothers to do more," he said.

"Still they have not yet given any firm commitment."

Kuwait's al Qabas newspaper said on Monday Kuwait may suggest trading in Iraq's outstanding debts for oil.

While Washington wanted the Bahrain meeting to focus on strengthening Iraq's bonds with its neighbors, Gulf ministers focused were more concerned about Middle East peace.

With the United States consumed by Iraq, Arabs have been critical of what they see as U.S. lack of interest until recently in trying to resolve the Israeli-Palestinian conflict.

The United States counters that Arab states have not done enough to push talks forward.

The final communique from the Bahrain meeting made no specific mention of Iraq but reaffirmed Arab commitments to the Israeli-Palestinian peace process that Washington relaunched at a conference in Annapolis, Maryland, last November.

In an indirect reference to Iran, the communique also said Arabs were committed to deterring the spread of nuclear weapons.

(Writing by Lin Noueihed; Editing by Giles Elgood)

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