Diplomats from industrialized countries and regional powers are gathering in Egypt ahead of a key international meeting on bringing stability to Iraq.

They will discuss reconstruction and security in the Sharm el-Sheikh resort.

On Thursday, delegates are to endorse the International Compact for Iraq (ICI), a five-year plan giving foreign support in exchange for reforms.

On the sidelines, US Secretary of State Condoleezza Rice may hold talks with Iranian counterpart Manouchehr Mottaki.

The two meetings - the international conference which will be held on Friday and the ICI meeting - will be "parallel but independent", Iraqi Foreign Minister Hoshyar Zebari said last month.

Representatives of Iraq's neighbors, including Iran and Syria, as well as of the G8 and EU are due to attend.

Ms Rice said she would not avoid an exchange with Mr Mottaki should it happen.

"I think I can handle any question that is asked of me," she said.

"If we encounter each other and wander to other subjects I am prepared to address them at least in terms of American policy."

Such a meeting would mark the first bilateral talks between the two countries' top diplomats since the United States cut relations in 1980.

There has been little contact between them ever since the Iranian revolution and the seizure of the US embassy in Tehran in 1979.

But the open question is whether even holding direct talks will lead to America and Iran coming to any sort of agreement, says the BBC's Jonathan Beale who is traveling with Ms Rice.

The Bush administration still accuses Iran of meddling inside neighboring Iraq - a charge Iran has strongly denied - and Washington refuses to discuss Iran's nuclear program until Tehran suspends its uranium enrichment.

Despite the invitation of Syria and Iran, there will still be notable absences, such as the leaders of the Shia militia who have not been invited, our correspondent adds.

Iraq-UN process

Friday's conference is preceded by a Thursday meeting attended by about 60 countries to endorse the UN-sponsored ICI plan.

"The goal of the International Compact with Iraq is not only to reduce Iraq's debt, but also to obtain support for the political and democratic process, as well as support in the battle against terrorism," Iraqi Prime Minister Nouri Maliki said.

The preparatory process on the ICI began last year at the initiative of the Iraqi government to establish a partnership with the international community.

This process has been co-chaired by Iraq and the UN through the UN special adviser on the ICI and other political issues, Ibrahim Gambari. It is supported by the World Bank.

Photo caption

Iraqi Prime Minister Nouri Maliki