Growth prospects vary between G7 nations

After meeting in Washington, the Group of Seven said economies were growing despite worries about rising oil prices and violence in the Middle East.

The G7 nations pledged to help rebuild Iraq, Afghanistan and the Palestinian areas and urged others to join in.

The talks came ahead of a meeting of the International Monetary Fund and the World Bank in Washington.

There is tight security for the IMF and World Bank talks, which were due to start as anti-globalisation protesters planned a demonstration.

Middle East challenge

"Prospects are favorable, and although risks remain, such as energy prices, overall the balance of risks to the outlook has improved," the ministers and central bankers from the US, Italy, Germany, the UK, France, Canada and Japan said a communique.

But they warned that energy prices could affect growth.

Many Palestinians are living on less than $2 a day

"We have there an element of importance both for its impact on growth and its impact on inflation," European Central Bank President Jean-Claude Trichet said.

"I said myself that it was something that called for a high level of responsibility by all involved."

The ministers and bankers said they hoped that efforts to improve job prospects in the Middle East would help stabilise what is now a deteriorating security situation.