The European Union says it will progressively increase its involvement in Iraq's reconstruction if the country manages to achieve stability and move toward a representative democracy in the months ahead. The 25-nation bloc released a strategy paper outlining how it proposes to help the war-torn nation.

The European Commission, the EU executive body, says the union's goals should be to help Iraq develop a stable democracy, create a diversified market economy, and ensure the country's re-integration into the international community.

EU External Relations Commissioner Chris Patten told reporters that restoring security to the shattered country is the key challenge facing the international community.

"Clearly, the amount that the international community overall will be able to do will depend a good deal on the security situation on the ground, and much of the organized violence, the violence of criminal gangs, the violence of what remains of Baathist security operations, and the violence associated with Iraqi nationalist fundamentalists,? Mr. Patten said. ?That violence will, I fear, be directed more and more at the attempts to make life better for ordinary Iraqis and at the efforts of ordinary Iraqis to come together to shape their own futures."

Mr. Patten says the next few months are likely to be, "make or break" for Iraq as it moves toward a return to full sovereignty under a new interim government later this month and elections for a transitional national assembly scheduled for January.

"What will matter is how the new government is perceived, whether it is independent or controlled by the coalition, whether it is seen as a neutral arbiter to prepare for elections, or whether it is seen as one that entrenches the interests of particular communities and individuals,? Mr. Patten said.

The EU paper, which will be discussed by the bloc's leaders next week at a summit in Brussels, outlines a three-phase EU-Iraq relationship that is linked to the stages of Iraq's own developing political process.

Mr. Patten has proposed that the European Union continue spending about $245 million a year on aid to Iraq through 2006. Individual member states also contribute to Iraqi reconstruction on their own, bringing the EU total for this year to $1.5 billion.

Mr. Patten says the way in which U.N. Security Council members negotiated the resolution passed on Tuesday is a sign that the international community agrees that a stable, democratic Iraq at peace with its neighbors is in everybody's interests.

"The willingness of the United States to compromise to the extent they have shows that they, too, are recognizing that international consensus on the way forward is important,? Mr. Patten said. ?International unity on the transition will certainly help. But, as the conditions on the ground show, that in itself that is no guarantee of success."

Mr. Patten says that much in the next few months will depend on the ability of moderate leaders in Iraq to resist pressure from extremists. "If the extremists win the consequences for Iraq are pretty unpleasant," he said.