Aid donors meeting to pave the way for billions of dollars in Iraqi reconstruction funding said on Wednesday the deteriorating security situation in the country could impede the flow of postwar aid.

Diplomats said Washington sought to allay concerns at the Brussels meeting about the safety of international organizations and aid agencies, which have pulled staff out of Iraq since last month's bomb attack on the U.N. headquarters in Baghdad.

And a senior U.S. official said the mounting guerrilla violence would not derail the donor community's timetable which will lead to a pledging conference in Madrid on October 23-24.

"Of course there was some discussion about security, but the major point to be carried away from all of this is that everyone remained firmly committed to the schedule," U.S. Undersecretary of Defense Dov Zakheim, the Pentagon's comptroller, told Reuters.

The "Core Group" meeting brought together officials from the United Nations, the World Bank, the International Monetary Fund, the United States, the European Union, Japan, the United Arab Emirates and the U.S.-led Coalition Provisional Authority.

"All participants confirmed their commitment to supporting reconstruction in Iraq and to a successful transition to a democratically elected Iraqi government," the group said in a statement. "They agreed that an adequate security environment will be necessary for the achievement of these goals."

The EU's Commissioner for External Relations, Chris Patten, was more blunt: "I can't pretend that attacks of the kind we are now seeing won't inevitably have some effect on international reconstruction efforts," he told the European Parliament.

TRUST FUND

The Core Group said proposals made in Brussels -- which it did not spell out -- would be presented at a meeting of potential donors in New York on Friday.

The U.S. civilian administrator in Iraq, Paul Bremer, says it would cost $2 billion a year to meet electricity demand and $16 billion over four years to deliver clean water.

Estimates of the final cost of reconstruction in Iraq, which has been shattered by war and more than a decade of isolation and poverty, run to as high as $100 billion -- far more than potential income from the world's second-largest oil reserves.

There was no word on how much donors plan to offer in Madrid for reconstruction aid in 2003-2004, largely because the United Nations and World Bank are still finalizing needs-assessment analyzes for 14 sectors ranging from health to education.

Budget requirements now being worked out in Baghdad -- which will make for gloomy reading because oil revenues are low and the state is collecting no taxes -- will have to go into the balance with these analyzes for donors to set a target figure.

Many donor nations opposed the U.S.-led war in Iraq and they are keen to avoid any appearance of funding the occupation. The Core Group discussed setting up a trust fund, independent of the occupying powers, to funnel aid and investment into the country.

Alan Larson, U.S. undersecretary of state for economic affairs, told Reuters the World Bank is likely to manage one fund and the United Nations may manage another for investments in areas it is more familiar with such as police training.

Close

Today's Top News		Top International News
+Premier: Stable RMB rate benefits all ( 2003-09-04) +Typhoon kills at least 36 in Guangdong ( 2003-09-04) +Ministry: No SARS recurrence in China ( 2003-09-04) +Free-trade initiative gathers momentum ( 2003-09-04) +Several nuclear-power plants to quench energy thirst ( 2003-09-04)		+Troops seize Taliban retreat after 9 days ( 2003-09-04) +In London, new sportscar doubles as boat ( 2003-09-04) +US offers to share Iraq role with UN ( 2003-09-04) +Israeli warplanes attack in southern Lebanon ( 2003-09-04) +Annan urges US to ratify nuke treaty ( 2003-09-04)