Freeing up oil exports would help pay for reconstruction

However diplomats at the UN predict renewed wrangling in the Security Council if the US pushes for an early easing of the punitive measures imposed after Iraq's invasion of Kuwait.

They say questions have first to be answered about whether Iraq still has weapons of mass destruction and who will control the country's resources.

The European Union is expected to call for a "central role" for the UN in the rebuilding of Iraq. EU leaders are holding a second day of talks in Athens, seeking common ground in the wake of their bitter disagreements over the war.

Several European countries have agreed to consider sending peacekeepers at the request of the US, but others think it is far too early for that.

In other diplomatic developments:

• Experts to meet in Paris to assess the damage to Iraq's national heritage by looters, and ways of recovering stolen items

• UN Security Council told that security worries are still keeping staff and patients away from Iraq's hospitals

• American officials say US Secretary of State Colin Powell may travel to Syria in the near future, although no firm plan has yet been made

"Now that Iraq is liberated the United Nations should lift economic sanctions on that country," Mr Bush told a crowd of workers at a Boeing aircraft factory in St Louis, Missouri.

Money matters

A White House spokesman said the US would soon propose a resolution to allow normal trade to resume, ending the UN humanitarian programme which has allowed Iraq to sell oil for basic goods for the last six years.

PUNISHING IRAQ August 1990: Sweeping sanctions imposed after invasion of Kuwait, including ban on all trade, flights to and from Iraq, embargo on oil exports and arms sales April 1991: Conditions set out for lifting sanctions including: elimination of weapons of mass destruction, recognition of Kuwaiti border, setting up of compensation fund

Separately, the Pentagon says the war has cost the US �20bn so far.

It had been expected that sanctions would eventually be lifted, but the BBC's Jon Leyne says it has come as a surprise that Washington wants to move so quickly.

He adds that it sounds like the opening shot of big new fight in the Security Council, which has control over Iraq's oil.

Diplomats there foresee obstacles to lifting sanctions, with the prospect of possible serious opposition from some powerful members.

A key part of the existing UN resolutions on Iraq focuses on the requirement for Iraq demonstrates it is free of weapons of mass destruction.

However UN weapons inspectors were withdrawn from Iraq ahead of the US-led military intervention.

Concerns remain about law and order and looting remain

The BBC's Greg Barrow at the UN says some Council members are insisting that there can be no progress on a new resolution seeking to lift UN sanctions until those inspectors are allowed back.

The Security Council will broach the issue of lifting sanctions next week, the Associated Press says.

According to US Ambassador John Negroponte, a resolution has not yet been drafted.

"The specifics are still being discussed among agencies in Washington," he said.

In developments in Iraq: