IRAQ - Saudis To Cancel Debt.

Saudi Foreign Minister Prince Saud al-Feisal on April 18 said Riyadh had agreed to write off 80% of the more than $15 bn debt it is owed by Iraq. This is viewed as one way Iraq's Sunni neighbours will assist Baghdad and show support for the government, though Riyadh had little hope of collecting the funds.

The US has been urging Saudi Arabia and other Sunni Arab states to play a greater role in backing Iraq, despite their mistrust of the Shi'ite groups dominating the government. Iraq's Finance Minister Bayan Jabr estimates his country's debt total at $140 bn, much of which was borrowed during the Iraq-Iran war in the 1980s.

It is said that the Saudi debt move is a prelude to a major role in by Sunni Arab regimes to be announced after the May 3-4 conference. But this is conditional on Shi'ite-Sunni peace, based on thorough negotiations towards "national reconciliation" to which Iran and Syria may be opposed, and on which the US is insisting. Failing that, the US may get Maliki to be replaced by a figure acceptable to the Sunni Arabs and moderate Shi'ites and the Kurds.