Snow said he expected "substantive discussions" with the G7 finance ministers and central bankers, and with the 124-nation International Monetary Fund and World Bank, about how to help the Iraqi recovery.

"It is important to recognize there that it is not simply recovering from 25 days of conflict but rather the task ahead is recovering from 25 years of economic misrule and mismanagement," Snow told a news conference.

Snow is to dine Friday and meet formally Saturday morning with his colleagues from the G7 nations -- Britain, Canada, France, Germany, Italy and Japan. Russia will join part of the talks.

He then joins meetings of the IMF and World Bank over the rest of the weekend.

US President George W. Bush had emphasised that international institutions would have a vital role to play in the reconstruction of Iraq after the war, Snow said.

He urged the World Bank, the IMF and other institutions to offer their expertise and technical assistance as soon as posssible.

World Bank president James Wolfensohn told a news conference earlier that he would ask his board of governors for approval before seeking an appraisal of Iraq's needs.

Snow said he was puzzled by that position.

"I hope he re-thinks that because I think the World Bank today should be getting involved," he said. "It is important that we begin to think about rebuilding the peace.

The US treasury secretary said the World Bank was an expert in assessing reconstruction needs.

"I am baffled why the World Bank is not undertaking these assessments," he said. "Mr Wolfensohn will be a part of these meetings and I intend to talk to him about it directly."

The G7 powers also would begin to review Iraq's debt, Snow said.

Experts said the Iraqi debt could amount to more than 100 billion dollars. Combined with claims from the Gulf War and debts on contracts, the number might swell to more than 300 billion dollars.

The Iraqi annual gross domestic product was something like 25 billion dollars, they said.

"It is a debt that is very large relative to the economic condition the country finds itself in," Snow said.

G7 countries were in a unique position to consider the question and offer "expertise, ideas and leadership." The debts were large, had not been serviced for a long time, and even the exact scale was uncertain, he said.

Although it was premature to try to resolve the debt issue, Snow said he hoped to get an idea of how his G7 colleagues might approach the matter.

Michael Mussa, former chief economist at the International Monetary Fund and scholar at the Institute for International Economics, said the Iraqi debt was expected to be written down substantially.

"You need to have a new Iraqi government in place that is capable of negotiating its side of that issue. It is not something that is going to be settled by an interim military administration or an interim UN-backed administration," he said.

Snow said the United States also had taken "vigorous" action to take over illicit Iraqi regime funds found in the United States.

Last month, the Treasury announced it was using special war powers granted by the USA Patriot Act to confiscate about 1.74 billion dollars in Iraqi funds frozen in US banks.

The treasury secretary said he would would work with G7 and IMF-World Bank ministers to intensify the effort to identify, marshal and return the assets of the Saddam regime to the Iraqi people.

SPACE.WIRE