"It's very simple. Our people risked their lives. Friendly coalition folks risked their lives, and therefore the contracting is going to reflect that, and that's what the US taxpayers expect," Bush said on Thursday.

 

"If these countries want to participate in helping the world become more secure, by enabling Iraq to emerge as a free and peaceful country, one way to contribute is through debt restructuring," Bush said.

   

The decision to bar war opponents like France, Russia and Germany from the contracts generated outrage in Europe and triggered new trans-Atlantic tensions.

 

New challenge

   

The timing of the announcement created a new challenge for Bush, coming as he prepared to send former Secretary of State James Baker to France, Germany and Russia as well as Italy and Britain to seek debt restructuring for Iraq.

 

Schroeder(R) and Annan upset
by Bush decision on contracts

But helping reduce Iraq's estimated $120 billion foreign debt will not mean those nations can compete for the $18.6 billion in reconstruction contracts, Bush said.

 

Bush scoffed at a question seeking his reaction to German Chancellor Gerhard Schroeder's statement on Thursday that international law must apply to the awarding of the contracts.

 

"International law? I better call my lawyer," he said.

   

The European Union's governing commission had said it would investigate whether the decision violated world trade rules. The US insists that its decision conforms to world trade rules.

 

Schroeder told a joint news conference in Berlin with UN Secretary General Kofi Annan that it was the task of all countries to help with reconstruction in Iraq. 

 

"It makes little sense to discuss who can and who cannot
individually participate economically in reconstruction.
International law must apply here and it does not help things to look backwards and is more directed at the past," he said. 
   

Annan called the limiting of contracts unfortunate and not
helpful for restoring transatlantic relations hurt by the invasion and urged Washington to reconsider its decision.
 

Divisive

 

In Munich, Russian Foreign Minister Igor Ivanov branded the US decision as divisive. Ivanov said that divisions in the international community over the conflict "must be overcome and in no case deepened”.

 

"Friendly coalition folks risked their lives, and therefore the contracting is going to reflect that"

George Bush,
President, USA

Canadian Prime Minister Jean Chretien on Thursday said in Ottawa that Bush had assured him Canada would not be shut out from bidding on the Iraqi contracts.

 

"This morning I had a conversation with President Bush and he wished me good luck and thanked me for Canada's effort in Afghanistan and for the assistance to Iraq," Chretien, who retires as premier on Friday, told reporters.

  

"President Bush said that press reports on the exclusion of Canada from Iraq's reconstruction were not true," he said.

 

Meanwhile, the Pentagon said on Thursday it would likely issue tenders for the contracts in the next few days and played down a delay in advertising the lucrative deals.

   

"We will likely issue the RFP's (requests for proposals) in a few days," a defence official said.