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Saudi Arabia to Discuss Reducing Iraqi Debt - 2004-01-22

Saudi Arabia has agreed to discuss reducing billions of dollars of debt owed by Iraq, following a meeting with the U-S special envoy on Iraqi debt, James Baker. The Saudi government says an independent Iraqi government must be in place before a deal can be reached.

Saudi Crown Prince Abdullah avoided making a specific agreement with Mr. Baker on how much of the estimated $30 billion the country would reduce. But he pledged to negotiate with an internationally recognized Iraqi government later this year.

During Mr. Baker's four-nation visit to the Gulf, he struck a similar agreement with Kuwait. Kuwait said on Wednesday it will begin talks on reducing nearly $16 billion of Iraqi debt, but also intends to wait for the installation of an independent Iraqi leadership before making a deal.

Qatar and the United Arab Emirates went a step further and agreed to forgive most of the estimated $7 billion both countries are owed. U.S. officials say eliminating the close to $120 billion Iraq owes the world is key to economic rebuilding and stability in that country.