Iranian Foreign Minister Manouchehr Mottaki meets the press at the first annual review of the International Compact with Iraq, at Upplands Vasby, Sweden, Thursday 29 May 2008

Iran's foreign minister has blamed the United States and its allies for the grave security situation in Iraq, which he says has "cast a shadow" on the lives of Iraqis.

Manouchehr Mottaki told a United Nations conference in Stockholm that Iraq's security problems are a result of what he called the "mistaken policies" of the U.S.-led coalition in Iraq.  He stressed Iran's commitment to rebuilding its war-torn neighbor.  U.S officials have accused Iran of arming and training Shi'ite insurgents in Iraq.

Iraqi Prime Minister Nouri al-Maliki opened the conference Thursday by urging the international community to cancel his country's debt.

Iraqi PM Nouri al-Maliki, PM Fredrik Reinfeldt of Sweden and UN Secretary-General Ban Ki-moon during opening of UN conference outside of Stockholm, 29 May 2008

Mr. Maliki also called for an end to compensation that Iraq is required to pay due to Saddam Hussein's 1990 invasion of Kuwait.

The conference brings together sponsors of a five-year plan to reform Iraq's economy and political system, known as the "International Compact with Iraq".  Hundreds of delegates from dozens of countries are in attendance.

Most of Iraq's foreign debt is owed to fellow Arab countries such as Saudi Arabia and Kuwait.  Mr. Mailiki says such debt has hampered reconstruction efforts.

Speaking to reporters before the conference, U.S. Secretary of State Condoleezza Rice sought to rally international support for Iraq while defending the Bush administration's decision to invade the country.  She said the U.S. was not alone in believing Saddam had weapons of mass destruction.

The conference is being co-chaired by U.N. Secretary-General Ban Ki-moon, who told delegates Iraq had made "notable progress."

He said Iraq is on its way toward meeting economic, political and security benchmarks.

U.S. officials say they will urge Arab states to expand ties with Iraq by opening embassies in Baghdad, increasing trade and working with Iraqi authorities on security.

Arab states have refused to send permanent diplomatic missions to Baghdad for the past few years because of security concerns.

 Some information for this report was provided by AFP and Reuters.