International donors are pushing ahead with a plan for getting aid to Iraq independent of the US-led administration in the country, following a meeting in Brussels.
The repair bill could top $100bn, some say
The European Union's external affairs commissioner Chris Patten said the new fund would be "separate but coordinated" with the US-led Coalition Provisional Authority (CPA).
The donors also said they were committed to helping reconstruction projects, despite the recent attacks on foreign targets.
A final decision on the fund is expected at a major reconstruction conference on 22-24 October.
The setting up of an independent fund is seen as important in getting some non-US countries to contribute towards the reconstruction effort.
Bill gets bigger
Over the past few days, assessments of the size of the reconstruction bill have soared.
Paul Bremer, the US administrator in Iraq, said last week that it was "almost impossible to exaggerate" the total cost.
Simply overhauling water and electricity systems, he said, could reach $30bn, and some estimates of the overall rebuilding cost have topped $100bn.
Donors are concerned about security
Separately, the US Congressional Budget Office has calculated that occupation of Iraq could cost up to $29bn a year, unless drastic cuts are made in the size of the security forces deployed there.
Such numbers have sparked disquiet among governments around the world, which are hoping to keep the repair bill to a minimum.
More work ahead
Some aid agencies have suspended or modified their work in the country as a result of a recent upsurge of violence, notably a huge explosion at the local headquarters of the United Nations.
Most donors and agencies have pledged not to allow violence to alter their plans for the country.
But the continuing instability there is nonetheless likely to be a factor in multilateral funding talks, especially if donors are unwilling to trust the US authorities with distributing aid.
In the meantime, donors are doing more work on assessing the country's precise needs.
A United Nations analysis on 14 needy sectors is currently close to completion, and is expected to be unveiled in mid-September with something close to an authoritative price-tag.