Iraq has won a trickle of debt relief pledges at a big international conference in Egypt.
Egypt and three East European countries agreed to waive debts owed by Iraq as part of an International Compact to support Iraqi institutions in exchange for political and economic reforms by the Baghdad government.
The first day of the two-day conference in the Red Sea resort of Sharm el-Sheikh is dedicated to the International Compact, a five-year plan to restore stability and economic prosperity through national reconciliation.
But much of the attention is on whether the United States will abandon its longstanding reluctance to hold high-level talks with the Iranian and Syrian governments, as recommended by the Baker-Hamilton commission on Iraq last year.
Iraq has been in turmoil since the United States invaded in 2003 and overthrew President Saddam Hussein. Tens of thousands of people have been killed, including some 3,300 Americans.
US officials said they were preparing for a meeting between US Secretary of State Condoleezza Rice and Syrian Foreign Minister Walid al-Moualem - the first meeting at this level between the two governments for more than two years.
But any encounter between Rice and Iranian Foreign Minister Manouchehr Mottaki will not tackle substance, added one of the officials, who asked not to be named.
The US official said that even the meeting between Rice and Moualem would deal mainly with security on the Iraqi-Syrian border, not with Lebanon or attempts to prosecute those who killed former Lebanese Prime Minister Rafik al-Hariri in 2005.
"I would expect they will have a discussion on border security issues," a senior State Department official said.
The United States has accused Syria of allowing foreign fighters to enter Iraq through the long border and is pushing for an international tribunal to try suspects in the killing of Hariri. A UN probe has implicated Lebanese and Syrian security officials in the killing but Damascus denies all the charges.
US officials said that if Rice does exchange words with the Iranian minister in Sharm el-Sheikh it would probably be in passing before dinner, without substantive discussions.
This would be in accordance with the wishes of the Iranian side, the official said.
Iran and the United States have not had relations since soon after the Islamic revolution in Iran in 1979.
In his opening speech to the two days of meetings in Egypt, Iraqi Prime Minister Nouri al-Maliki appealed for debt relief. "We call on everybody participating in this conference to write off the accumulated debts of Iraq," he said.
Iraq sits on the world's third-largest proven crude oil reserves but is struggling to rebuild after four years of war.
Iraqi Finance Minister Bayan Jabor said the three Eastern European countries - Slovenia, Bulgaria and Poland - would agree to forgive 80% of Iraqi debt but did not say how much that would be.
He said the European Union would grant Iraq $200 million, and he expected grants from some Asian countries as well.
"They will help us and in return Iraq will have to commit to finding real national reconciliation," Jabor told Reuters.
But James Dobbins, an analysts at the RAND Corporation, said debt relief was of secondary importance because the Iraqis are not paying off the money they owed anyway.
"It is a purely paper transaction. It's symbolic but it doesn't have any immediate effect," he said.
Jabor said that Iraq had rejected as unacceptable an offer from Russia to forgive the debt it is owed by Baghdad in return for access to a major Iraqi oilfield.
"The Russians are hesitant. They want investment in the Rumaila oilfield in return for eliminating the debt," he said.
When Saudi Arabia announced last month that it was writing off 80% of the more than $15 billion it was owed by Iraq, Jabor estimated his country's debt at $140 billion.
Saudi Foreign Minister Prince Saud al-Faisal renewed the Saudi promise at the opening session on Thursday but said the details were still under discussion.
"It (Saudi Arabia) has submitted all the information it possesses to the Iraqi side, and the matter is still at the discussion stage ... to reach an appropriate settlement. Our treatment of the question ... will be in accordance with the guidelines (of) the Paris Club," he added. The Paris Club has recommended waiving 80% of Iraqi debt.
