US Attorney General John Ashcroft is due to speak on Thursday about corruption while a senior US official in Washington has said US Vice President Dick Cheney would try to heal rifts with Europeans over the war on terrorism when he speaks on Saturday.

Pakistani President and US ally Pervez Musharraf is also due to speak to the more than 2200 political and economic leaders gathered at the snowy Swiss resort for five days of public and private talks amid tight security.

A senior US official said on Wednesday in Washington that Cheney, a principal architect of the US hard-line stance, would make it clear even to critics of the war in Iraq that "we want to encourage them to participate" in US-led efforts to set that war-torn country on course for prosperity and democracy.

Nevertheless, the US overseer in Iraq, Paul Bremer cancelled his planned trip to the forum. Organisers said they did not know why Bremer had withdrawn.

Forum officials said they were hopeful US Secretary General Kofi Annan would make an announcement there about sending a UN fact-finding mission to Iraq.

Iraq wants UN opinion

A political leader from Iraq's Shia Muslims said the top Shia cleric, Ayat Allah Ali al-Sistani, was likely to drop a demand for early direct elections if the United Nations concluded they were not feasible.

al-Sistani says he will respect the
UN's position regarding elections

"If there is a UN delegation that has a background in electoral and census matters, and has an open dialogue... one side may be convinced by what the other says," said Ibrahim al-Jaafari, head of Iraq's Shia Dawa party.
   
"Whatever the result, if it comes to an agreement, I believe Sistani will accept that," said Jaafari, who is also a member of the Governing Council.

British Foreign Secretary Jack Straw pledged on Wednesday to work towards a federal government in Iraq, but not dictate its composition. He sidestepped questions about whether the coalition would bow to demands for early elections in Iraq.

"Our job is not to dictate Iraq's future, but to support the consensus of Iraqi opinion," said Britain's top diplomat.

Khatami up-beat

Iranian President Muhammad Khatami also grabbed the limelight on Wednesday, voicing confidence that a showdown with conservatives over next month's parliamentary elections was heading towards a settlement.

Shortly after top reformists in Tehran submitted their resignations to put pressure on the conservatives, Khatami told a news conference at the World Economic Forum there that he and his allies were hopeful of achieving a "free and competitive" vote.

"My colleagues and I have chosen one goal, to make sure that there is free and competitive elections," Khatami said. "And the course of the events is going, hopefully through the grace of God, towards such a free and competitive election."

Khatami is confident elections will
be "free and competitive"

He also noted a change in "tone" from Washington, what some interpreted as a slight opening to the United States.

"I hope the changes in tone used by the United States will not be a tactical ploy but a real strategy to change policies and attitude," he said.

Economic issues

The health of the world economy was also on the top agenda on Thursday, with the OECD chief economist Jean-Philippe Cotis due to speak.

Economic experts there cheered on Wednesday the global economic recovery taking root, but also warned of uncertainties ahead, especially if the rebound in the United States lost momentum.

A major concern among economic leaders there is the falling US dollar, but the US official in Washington signalled that Cheney would be bringing no new ideas on the matter when he arrived in Davos.

The US official in Washington said Cheney would tell political and economic leaders assembled there that the US economy "appears to be doing much better", but would stick to the US' long-standing, but little-believed strong dollar policy.