It was also time to start phasing out the use of oil proceeds to compensate victims of Iraq's 1990 invasion of Kuwait, and to consider lifting an arms embargo imposed in 1990, Ambassador Samir Sumaidai said on Tuesday.

A decision in all three matters would be up to the 15-nation UN Security Council, he told a news conference called two days after Sunday's elections in Iraq.

"We have declared clearly to the world that we want to be at peace with our neighbours," he said. "Therefore sanctions and the remnants of the sanctions that were put on the previous regime are anachronistic and inappropriate and we will be working to remove them and all their effects."

Compensation claims

Under sanctions imposed by the Security Council after Iraq invaded Kuwait, money from Iraqi oil sales - $67 billion between 1996 and 2003 - has been divided among a variety of UN-administered programmes.

"We have declared clearly to the world that we want to be at peace with our neighbours"

Iraq's UN Ambassador Samir Sumaidai

While some of these, such as the oil-for-food programme, have since been shut down, some of the money, collected in the past, is still being used to finance UN weapons inspection teams even though inspections were called off just before the US-led invasion of Iraq in March 2003.

The UN Monitoring, Verification and Inspection Commission, which currently has an annual budget of about $12 million, has been on hold since then while the Security Council mulls what to do with it.

A fixed percentage of oil proceeds is still earmarked to pay off claims of losses due to the Kuwait invasion, as determined by the Geneva-based UN Compensation Commission, which is still performing that task.

'Doling out'

The commission has received claims totalling $350 billion and has approved $51.8 billion in compensation so far.

"We don't want to be forever doling out money," Sumaidai said. "We have to have closure."

"I believe there is a clear will, a determination by all parties, to make sure that everybody is included at the time of writing the constitution."