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Gary Younge
Horse-trading on sanctions begins at UN

France and Russia oppose the plan and call instead for a return of the weapons inspectors and a stronger role for the UN in rebuilding Iraq.

The coalition wants revenue from the sale of Iraqi oil to be allowed to pay for the reconstruction of the country. It would also lift legal restrictions on governments and companies doing business in the country.

At present any contract to buy oil from Iraq or export non-military goods to the country requires UN approval. Under the British and American proposal, the UN's role would be reduced to a seat on an international advisory board.

Security council diplomats said the board would also include the World Bank and the International Monetary Fund. It would audit how income from Iraq's oil industry was spent and ensure that it was used to benefit the Iraqi people.

France and Germany have been less less strident in their criticism of the Anglo-American initiative than they were before the war, but Russia, which has considerable financial interests in the country, strongly opposes the plan.

Moscow says that sanctions cannot be lifted until Iraq has been cleared of having weapons of mass destruction. The UN weapons inspectors must be allowed to return as soon as possible.

The US, which has its own weapons inspectors in Iraq, is opposed to the return of Hans Blix's team. "American resistance to Unmovic going back is pretty strong," said one security council diplomat.

The US announced the suspension yesterday of many of the sanctions it imposed on Iraq in 1991. American companies are now permitted to export some goods to the country and US residents may send up to $500 (£313) a month to an Iraqi household.

"The regime the sanctions were directed against no longer rules Iraq," President Bush said on Wednesday night.

"No country can in good conscience support using sanctions to hold back the hopes of the Iraqi people."

Those drafting the Anglo-American resolution say they have made concessions. The plan would allow the partial payment of $10bn of contracts - many of which are with Russian companies - which were authorised by the UN before the war. It also allows for the UN to continue to play a part, something which the US secretary of state, Colin Powell, described on Wednesday as "vital". Even so, the plan details little explicit authority for the UN beyond an advisory role.

Tony Blair's official spokesman said yesterday that the prime minister believed "there was a solution which addressed the different positions, if people wanted to have it."

"He said he felt that at the moment people were approaching this constructively, which was welcome," the spokesman said.

But key question of primary control over the political and financial reconstruction remains - with the US and UK resolved that, as the military victors, they should retain it.

Most are preparing for a round of tough negotiations. "I think it will be long and hard," one security council diplomat told the New York Times.

"I think people will try and be a bit careful with the vitriol this time and try and make it constructive."

Russia says it supports the lifting of sanctions in principle but, the Russian foreign minister,, Igor Ivanov, added: "They were passed by the UN security council, and only the UN security council has the power to change or halt these sanctions."

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