Wary of US control of Iraqi development monies, several European donors proposed on Tuesday an international fund for reconstruction during a 52-nation conference on measures to rebuild Iraq.

But the proposal for a separate fund was one of the few signs of discomfort with the US-led occupiers at the first UN-sponsored meeting among US and British occupation authorities, Iraqi delegates and international agencies.

"A number of delegates wanted this to be seen as a moment of unity," said Mark Malloch Brown, head of the UN Development Program, which initiated the conference, referring to the bitterness over the U.S.-led invasion of Iraq.

"What it does show is that the membership is united around the issue of building as quickly as possible an Iraq which is back on its own feet," he told a news conference.

At the conclusion of the two-day meeting, the United Nations, the World Bank, the European Union, Japan, the United Arab Emirates as well as the United States agreed to organize a donors conference in October to address reconstruction.

Malloch Brown said "there was strong support" for a separate fund, adding: "Not every donor will necessarily use it. But we were asked to go away and develop the options so at the time of the full conference donors could decide how they wanted such a fund structured."

The new fund would be parallel to the Development Fund for Iraq set up by the United States and Britain to spend Iraqi oil monies on emergency needs and rebuilding the war-shattered country. Participants in the conference said France and several other large donors said they wanted multinational control over monies they might donate.

And their assistance will be needed. "There was general agreement that petroleum income will not be sufficient to cover Iraq's reconstruction needs over the next few years, making donor assistance essential," a closing statement said.

The US-led Coalition Provisional Authority, which includes Iraqi members, was pressed by UN officials and donor nations to put their its on paper and devise a budget as soon as possible or the donor conference would flounder.

"The basic message out of the meeting is that the CPA should, and in fact is, preparing a preliminary budget for the rest of this year to 2004," said Alan Larson, U.S. undersecretary of State for agricultural and economic affairs.

LOOTING AND CHAOS

The post-war chaos and the looting of vital Iraqi ministries was never far from the surface, with some delegates reminded of the deteriorating security in Afghanistan.

"The lesson of Afghanistan hovered a bit like a ghost over the meeting," said Kathleen Hunt, a representative of CARE International and a participant in the meetings.

"Security has to be addressed first, not as an afterthought, so ambitious plans can be carried out," she said.

Ramiro Lopez da Silva, the U.N. humanitarian coordinator in Iraq, noted that 60 percent to 70 percent of Iraq's 25 million people had been totally dependent on monthly food rations under the U.N.-Iraq oil-for-food humanitarian program, now being phased out.

"The same is true of health systems, water and sanitation, electricity, agriculture, education, housing and the like," he said. "There needs to be social safety nets in place as (Iraq) moves to a market economy."

Paul Bremer, the chief U.S. administrator in Iraq, has made clear he wants to privatize more than 40 government-owned firms. But he first wants to turn inefficient state-run firms into corporate bodies.

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