The French ambassador to the United Nations has proposed the immediate suspension of UN sanctions against Iraq, in an unexpected move.
Iraqis are struggling to cope after years of sanctions and war
The United States has been pressing for the sanctions to be lifted since US-led forces ousted Saddam Hussein's regime.
The BBC's Greg Barrow at the UN says France's initiative marks a significant shift in its position - and it was welcomed by US diplomats.
France and the United States disagreed strongly on the UN role in Iraq in the run-up to the US-led war to topple Saddam Hussein.
The UN embargo was imposed in August 1990, shortly after Iraq invaded Kuwait, and dismantling it would pave the way for Iraq to sell oil to help pay for post-war reconstruction.
Rift over inspections
The sanctions and subsequent war have devastated Iraq's economy and infrastructure.
Last week, US President George W Bush called for sanctions to be lifted quickly.
The French ambassador, Jean-Marc de la Sabliere, said the sanctions issue was linked by past Security Council resolutions to a certification of Iraqi disarmament.
"So meanwhile, we could suspend the sanctions and adjust the oil-for-food [programme] with an idea of its phasing out," he told reporters, following a briefing by UN chief weapons inspector Hans Blix.
But Mr de la Sabliere did not link a suspension of the sanctions to a return of UN weapons inspectors to Iraq.
France had earlier insisted that UN inspectors alone had the authority to hunt for weapons of mass destruction (WMD).
Under the oil-for-food programme - launched in December 1996 but suspended during the war - the UN managed the use of funds generated by limited Iraqi oil sales to pay for imports of humanitarian goods.
A statistical view of daily life in Iraq
The BBC's diplomatic correspondent William Horsley says the latest developments at the UN suggest that the US is getting its way.
Mr de la Sabliere spoke of the need for new arrangements so that UN inspectors could work alongside US forces to finish the job of certifying whether Iraq is free of WMD.
Inspectors were withdrawn from Iraq shortly before the US and Britain launched the war to oust Saddam Hussein - a war condemned by France, Germany and Russia.
Since the war the US has deployed its own teams to look for WMD, which it cited as the key reason for launching war, but so far none are reported to have been found.
Many nations on the Security Council say UN inspectors should be the ones to verify any new discoveries, and on Tuesday Mr Blix presented a case for sending his teams back to Iraq.
Provided food for about 60% of Iraqis
Aimed to give Iraqis 2,470 calories per day
570,000 tonnes of food a month
44,000 distribution agents
Five entry points
The US ambassador, John Negroponte, reacted coolly, saying the United States and Britain had assumed responsibility for disarming Iraq.
And the UK ambassador, Sir Jeremy Greenstock, said it was still too early to speak of an imminent return of UN inspectors.
Diplomats said Mr de la Sabliere did not present a draft resolution to suspend the sanctions. Suspension would mean the sanctions remained in legal force but were not applied - a stage before lifting them completely.
Like France, Russia also indicated its readiness to consider a gradual suspension of sanctions pending a final future decision that Iraq has relinquished all WMD.
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There simply isn't time to wait for the UN inspectors to spool up to speed
The Russian ambassador to the UN, Sergei Lavrov, said "we are not at all opposing lifting of sanctions - what we are insisting on is that Security Council resolutions must be implemented".
In a report to the Security Council, the head of the International Atomic Energy Agency, Mohammed ElBaradei, said the IAEA was "the sole legal authority to verify Iraq's nuclear activities".
Before the war an IAEA team worked in Iraq alongside Mr Blix's inspectors.
In other developments:
- Hundreds of thousands of Shia Muslims throng the streets of the central Iraqi city of Karbala for the climax of a religious pilgrimage that was banned by Saddam Hussein
- US Brigadier General Vincent Brooks says US soldiers found some $600m in cash hidden behind a wall in a Baghdad building but that it was as yet unclear whether the money was real or counterfeit
- US Central Command announces the capture of Muhammad Hazmaq al-Zubaidi - number 18 on the US list of most-wanted former Iraqi regime officials