BBC Diplomatic Correspondent James Robbins: Menem believes reconciliation is key to strengthened relations

The 'ceremony of reconciliation' in the cathedral crypt is the centrepiece of President Menem's visit to Britain.

Leading military figures and veterans of the 1982 conflict from both nations attended the service.

HMS Antelope: hit during the Falklands War

Among them was the Duke of York who flew Royal Navy Sea King helicopters in the war.

A total of 252 British servicemen, three islanders and 952 Argentine soldiers died in the war.

The UK Government was represented at the service by Foreign Secretary Robin Cook.

Lady Thatcher, who was prime minister during the conflict, declined an offer to attend, saying she would be out of the country at the time.

Others connected with the conflict also stayed away from St Paul's.

Desmond Keoghane, whose son Kevin, a sergeant in the Welsh Guards, was killed on the Sir Galahad, refused to go to the service.

BBC Diplomatic Correspondent James Robbins reports on the steps to reconciliation

"The Argentinians are still not saying they're going to give up sovereignty of the islands.

"And until they do that I don't think that I and quite a few other people would really be willing to parade in this sort of state with them.

"If they gave up sovereignty then I think it might be a different picture."

During the course of his five-day visit, President Menem, who flew into Heathrow Airport on Tuesday, is meeting Prime Minister Tony Blair and also having lunch with the Queen.

It is the first visit by an Argentine leader since 1960.

First visit by an Argentine leader since 1960

Both countries are anxious to put the war behind them and concentrate on issues as trade relations, environmental pollution and the global financial crisis.

The UK, which injects some £2bn ($3.3bn), is the second biggest EU investor in Argentina.

The Falklands nevertheless remain a highly sensitive visit with Mr Menem keen to open a dialogue on establishing joint sovereignty for the islands.

However, Mr Blair, who will meet Mr Menem on Thursday, is adamant the issue is not on the agenda.

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Last week, in an article in The Sun newspaper, he voiced "deep regret" for "a conflict that should never have happened", but denied it amounted to an apology.

In the House of Commons, Mr Cook welcomed the Argentine leader's arrival.

He said: "We should recall that President Menem played no part in the government of Argentina with whom we were at war two decades ago."

Mr Menem, who is divorced, is also accompanied by his 28-year-old daughter, Zulema.

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She found herself the subject of almost as much attention as her father on their arrival on Tuesday.

"All eyes on the divine Miss Menem," wrote the Daily Mail over its article on Wednesday.

"Daughter is right-hand aide for Menem," The Times said, describing her as "a racy Buenos Aires fashion world socialite".

The Sun reported she was threatening to start a protocol row by attempting to kiss Queen Elizabeth at a lunch at Buckingham Palace on Wednesday, instead of shaking her hand.

Zulema has regularly accompanied her father on foreign trips, as well as being at his side at official receptions in Argentina.