The base sits on the banks of the Strait of Hormuz, through which 40 per cent of the world's crude oil is transported.

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France opens 'peace camp'

Bernard Kouchner, the French foreign minister, said that the naval base in Abu Dhabi was aimed at supporting and training France's allies in the region.

"Some 90 per cent of European trade traffic is by sea and we have to defend traffic and trade and we are interested in the Gulf and want to bring about the necessary balance in this region," he said.

Business interests

France will also play a role in combating piracy in the region.

"The naval base is also strategic for international security and stability. We assure maritime trade security in this region, the Mediterranean sea, the Gulf waters and the Indian Ocean," Kouchner said.

He declined to comment on whether the UAE had finalised a deal to buy Rafale fighter planes from France's Dassault Aviation.

Dassault said on Saturday it was in talks with the UAE on a possible order for its Rafale fighters, in what would be the first sale of the aircraft to a foreign buyer.

The Le Parisien newspaper reported on Saturday that France was finalising the sale of 60 Rafale jets in a deal worth $8-11bn, and that Sarkozy would personally push the issue during his visit to Abu Dhabi.

Dassault declined to confirm the figures and said only that an agreement might be reached this year.

Nuclear plans

France also hopes the base will strengthen its ties with the UAE, which plans to build a number of nuclear reactors to meet an expected need for an extra 40,000 megawatts of electricity by 2017.

France's Total, Suez, and state nuclear reactor maker Areva said last year they planned to develop two third-generation nuclear reactors in the UAE.

The Reuters news agency reported a source close to Sarkozy, who arrived in Abu Dhabi on Monday night, as saying that state-controlled power firm EDF would be joining the French consortium.

US firms GE and Westinghouse Electric are also hoping to compete for a share of the expected $40bn market.