US Treasury Secretary John Snow, who hosts a dinner later with his colleagues from Britain, Canada, France, Germany, Italy and Japan, promised to put the Iraq debt mountain on the G7 menu.

G7 finance ministers and central bankers, joined for part of their talks by Russia, are to meet formally Saturday morning.

They then join colleagues from the 184-nation International Monetary Fund and World Bank for talks over the rest of the weekend about global economic prospects.

Iraq is not on the official agenda. But the question of its reconstruction and its debts has elbowed its way into the discussions.

Analysts say the problem for the powers will be to present a unified front to help boost shaken confidence in the economy, while wrangling over the fallout of a war hotly opposed by France, Germany and Russia.

Snow said he expected "substantive discussions" with the G7 about Iraq's debt, estimated at 127 billion dollars in pure debt including about 47 billion dollars of accured interest.

"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.

Deputy US Defense Secretary Paul Wolfowitz told Congress that France, Germany and Russia could contribute to the reconstruction of Iraq by wiping clean Iraq's enormous debt.

"I hope, for example, they'll think about the very large debts that come from money that was lent to Saddam Hussein to buy weapons and to build palaces and to build instruments of repression," he said in testimony to the Senate Armed Services Committee.

Germany bristled at the suggestion.

The question of wiping clean Iraq's enormous debt was a matter for the Paris Club and could not be decided bilaterally, a spokesman for the German Finance Ministry said in Berlin.

As long as the issue was not discussed within the Paris Club, the question of forgiving all or part of Iraq's debt "cannot be answered with a yes or a no," the spokesman said.

The Paris Club, set up in 1956, is an informal group of official creditors whose role is to find co-ordinated and sustainable solutions to the payment difficulties experienced by debtor nations.

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.

"Certainly, the people of Iraq should not be saddled with those debts incurred through the regime of the dictator who is now gone," he told a Fox television interviewer.

Rick Barton, director of the Iraq post-conflict reconstruction project at the Center for Strategic and International Studies (CSIS), a Washington think-tank, said Iraq's liabilities amounted to more than its pure debt.

The liabilities broke down as follows:

-- 127 billion dollars in debt, of which 47 billion dollars was accrued interest.

-- 199 billion dollars in Gulf War compensation claims. Of this, 172 billion dollars is for companies, governments and institutions. The rest is money still owed to families and individuals.

-- 57 billion dollars owed for pending contracts, such as energy and telecommunications deals. Most of this is owed to Russia.

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