Global Policy Forum

By Nicole Winfield

Britain and France circulated dueling proposals Friday to improve the humanitarian situation in Iraq, which the United Nations reported was still dire despite some recent improvements.

The draft resolutions were designed to extend the U.N. oil-for-food program, which lets Baghdad sell its oil to buy food and medicine for its 22 million people living under U.N. sanctions.

But they also contained controversial suggestions for other changes to the program - such as the French call to use oil-for-food proceeds to pay Iraq's OPEC dues - that merely served to reinforce the divisions in the council.

Secretary-General Kofi Annan, meanwhile, issued a report Friday on the overall humanitarian situation in Iraq, saying the nutritional and health status of Iraq's people continues to be a "major concern."

He urged Iraq to use excess proceeds from the oil-for-food program to reduce malnutrition levels and called for the council to speed up its approval of contracts for vital equipment to repair Iraq's oil sector.

Annan issued a separate report Friday from the new arms inspection agency, saying it had made a "good start" in recruiting new arms experts but noting that Iraq would have to start cooperating in order for them to resume weapons searches.

The British draft proposes a one-year extension for the program, compared to the regular six-month phases that have defined oil-for-food since its inception in 1996.

Britain and the United States have argued that the yearlong extension would enable U.N. agencies and companies doing business with Iraq through the program to better plan and coordinate aid deliveries.

But there was little indication Iraq would agree to a modified extension since it would imply at least symbolically that sanctions would remain in place for another year, council diplomats said.

France, one of Iraq's allies on the council, circulated a rival draft resolution that calls for a regular six-month extension and proposes other amendments that drew immediate opposition from the United States.

The French draft, for example, suggested that the council agree to a longtime Iraqi demand to let the government use money from its oil sales to pay the dlrs 34 million Baghdad owes the United Nations and OPEC in back dues.

The United States ruled out such a proposal, saying aid money shouldn't be used to finance Iraq's diplomatic budget.

Washington also criticized a key proposal in the rival British draft resolution that was intended to speed up delivery to Iraq of badly needed water and sanitation equipment.

The United States has placed about $1.6 billion worth of contracts for such equipment on "hold" out of concern that they might be used for military purposes.

While Washington has objected to the British call for speedier deliveries, the United States has released $720 million worth of contracts since March 1 that have been on hold, U.S. diplomats said.