"In the eyes of the Iraqis and the Arab world, the identification of those responsible for reconstruction with the aggressors would undermine all reconstruction," Simitis told a group of socialist MEPs in Athens on Wednesday.

He added only the involvement of the United Nations could prevent an explosion of tensions in the region.

"The dominant role of the aggressors (would) exclude the cooperation of the Arab world necessary to heal the wounds of war," he continued.

"Only the UN can play the protagonist in Iraq because they alone can prevent an explosion of ethnic or regional tensions, the further marginalisation of the Iraqi people and, indirectly, an increase in terrorism," he said.

Simitis also warned that stability in the region would be impossible if the Palestinian question was not resolved and if other countries in the region were threatened, a clear reference to recent US warnings to Iran and Syria.

On Wednesday US Secretary of State Colin Powell said European countries could cooperate in rebuilding Iraq after a war.

Powell, speaking via a video link to a conference to European officials in Greece said the United States was aware it could not meet the challenges of the future on its own, and wanted a strong EU.

"I have no doubt that whatever their views on the war, America and Europe will work together to help the liberated people of Iraq for a better future in the region", Powell said.

He was speaking the day before he was due to meet European Union and NATO leaders in Brussels.

SPACE.WIRE