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Last Updated: Thursday, 3 May 2007, 16:23 GMT 17:23 UK
US and Syria hold landmark talks
US Secretary of State Condoleezza Rice
Condoleezza Rice also said "hello" to her Iranian counterpart
US Secretary of State Condoleezza Rice has held a ground-breaking meeting with Syrian Foreign Minister Walid Muallem at a summit in Egypt.

Mr Muallem said the highest-level talks between the two countries in several years were "frank and constructive".

US-Syrian relations have worsened in recent years over claims of Syrian interference in Iraq and Lebanon.

The meeting took place on the sidelines of a conference called to help develop and bring peace to Iraq.

Delegates endorsed a five-year International Compact for Iraq (ICI), under which Iraq will institute reforms promoting national reconciliation, and will receive major financial assistance.

'Businesslike' talks

US relations with Syria have been strained over Damascus's alleged involvement in the assassination of former Lebanese Prime Minister Rafik Hariri in 2005, and accusations that it has allowed foreign jihadists to enter Iraq through Syria.

Ms Rice said she had raised the Iraq issue at what she said was a "professional and businesslike" meeting with Mr Muallem.

Specific financial commitments made by particular countries are estimated at over $30bn
Ban Ki-moon
UN Secretary General

Mr Muallem said the meeting had focused on "the situation in Iraq and how to achieve stability".

Earlier, a US military spokesman in Baghdad said: "There has been some movement by the Syrians.

"There has been a reduction in the flow of foreign fighters [through Syria] into Iraq" for more than a month, Major General William Caldwell said.

Greeting over lunch

There is speculation that Ms Rice may also hold talks with her Iranian counterpart, Manouchehr Mottaki.

If she does, it will be the first such high-level talks since the US cut relations with Iran in 1980.

Ms Rice and Mr Mottaki greeted each other at lunch at the conference, but "they said hello, that's about it", said US state department spokesman Sean McCormack.

United States
Saudi Arabia
European Union

Iraq has been encouraging the US to open dialogue with both Syria and Iran, which it believes could play a role in stemming the violence in Iraq.

At the Egypt conference Iraq's Prime Minister Nouri Maliki urged other countries to write off its debts.

He said Iraq needed to free up funds to invest in much-needed reconstruction projects.

United Nations Secretary General Ban Ki-moon said many countries had responded.

"Specific financial commitments made by particular countries are estimated at over $30bn (15bn)," he said.

Iraqi Finance Minister Bayan Jabor said Egypt had agreed to write off all the money it was owed by Iraq - about $800m - while Slovenia, Bulgaria and Poland would cancel 80% of Iraq's debts.

He said the European Union had pledged $200m in grants, while British Foreign Secretary Margaret Beckett committed the UK to the same amount.

"In return Iraq will have to commit to finding real national reconciliation," Mr Jabor told Reuters.

Mr Maliki said: "We are now passing a turning point. I believe international efforts will help us achieve our aspirations and this will send a positive message... Iraq has the support and sympathy of the world."

Separate talks on Friday, involving all Iraq's neighbouring countries and other major powers, will focus on Iraq's security.

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