Iraq has offered to double wheat imports from Australia - one of the staunchest supporters of a US war - if there is a peaceful solution.

Iraq is Australia's biggest single customer for wheat and normally buys about 2 million tonnes worth about 900m Australian dollars (�330.5m; $532.3m).

Last year Iraq bought only 1 million tonnes of wheat after it cut orders by over 40% in December in response to Australia's support for US threats of war.

A senior Iraqi diplomat, Saad Al-Samarai, told Reuters that Iraq's Ministry of Trade could double its imports, which would return them to their usual levels.

Iraq has signed contracts under the so-called "oil for food" deal for one million tonnes of Australian wheat in 2003.

Mr Al-Samarai warned last year that these orders could be cancelled if Australia joined the US in a war.

Australia's worst drought in a century has already pushed its trade deficit to its highest level in two years.

Alternative suppliers

A war with Iraq could threatened Australia's entire A$5bn a year exports of wheat to the Middle East.

The Australian Wheat Board has already warned that the severe drought will reduce the total harvest by about 60% to 10 million tonnes this year, costing the industry A$5bn.

Farmers have accused the Australian government of jeopardising exports with its "over the top" support of the US.

Iraq has reportedly placed orders with France and Pakistan and in January began importing wheat from India to make up the shortfall.

In May 2001, Iraq rejected further supplies of Indian wheat because of quality concerns but exporters have since built cleaning facilities at ports to sift out impurities.