PARIS -- Nineteen leading industrial nations have agreed to forgive 80 percent of the $39 billion of debt owed by Iraq to expedite the country's reconstruction.
The Group of Seven nations at the core of the so-called Paris Club of 19 nations -- the United States, Britain, Canada, France, Germany, Italy and Japan -- had vowed earlier this year to complete a debt relief package before the end of the year and before Iraq's elections, planned for Jan. 30.
The New York Times said Sunday's agreement puts pressure on Saudi Arabia, Kuwait and Iraq's other Middle Eastern neighbors to forgive obligations owed them, including billions in reparations Iraq owes from the Persian Gulf war in 1991.
President Bush issued a statement congratulating Iraq's interim government for the agreement, saying it represented a major international contribution to Iraq's political and economic reconstruction.
"I encourage non-Paris Club creditor nations to agree to comparable debt reduction for Iraq," Bush said.
Iraq's foreign debt totals $120.2 billion, a legacy of Saddam Hussein's wars and his last decade in power, when United Nations sanctions severely restricted the country's oil revenue.
