World

Iraq: Debts & Deaths

December 30, 2003 / 7:36 AM EST / CBS/AP

Efforts to erase Iraq's massive foreign debt received a boost Monday when Japan said it would likely forgive much of what it is owed and China hinted it might do the same.

The announcements came after special U.S. envoy and former Secretary of State James A. Baker visited Tokyo and Beijing. Baker has already secured similar promises from several countries, including France, Germany and Russia.

Japan pledged to forgive "the vast majority" of its Iraqi debt if other Paris Club nations do the same. The announcement reversed earlier Japanese hesitancy to participate in Iraqi debt relief.

Iraq owes Japan some $4.1 billion, but that number reaches an estimated $7.76 billion when late penalties and other fees are included, the government said earlier this month.

The United States quickly praised the announcement.

"We welcome and strongly endorse Japan's statement today," said White House spokesman Sean McCormack. "This very forthcoming position is further evidence of Prime Minister (Junichiro) Koizumi's and Japan's global leadership on Iraqi reconstruction."

Japan is already providing $5 billion to Iraqi reconstruction is dispatching 1,000 troops on a humanitarian mission to the area.

Later, Chinese Premier Wen Jiabao said China "will consider" reducing debts owed to it by Iraq, the official Xinhua News Agency reported.

The report gave no indication by how much China might reduce Iraq's debts. State media say China was owed about $1.1 billion by Baghdad before the 1990 Gulf War, but the figure owed today isn't clear.

In other developments:

The U.S. military says suspected Iraqi insurgents threw a grenade and fired on U.S. soldiers, who were searching homes in the city of Mosul. The resulting firefight left three Iraqis dead and two American soldiers injured. The Americans are listed in stable condition.

Iraqi police in the northern city of Kirkuk say they've arrested four foreigners who could be linked to attacks in the city. They say the two Egyptians, one Afghan and one Iranian had fake passports and were handed over to U.S. forces.

U.S. troops found and defused a roadside bomb in Mosul, one day after two similar bombs killed two U.S. soldiers and two Iraqi children.

Six more people reportedly have died from wounds caused by weekend attacks in Karbala. A Polish news agency reports one Bulgarian soldier and five Iraqis are the latest fatalities. At least 19 people have died from the attack. No Americans were killed.

British Prime Minister Tony Blair said evidence uncovered in Iraq so far showed Saddam Hussein intended to "conceal weapons". But chief U.S. administrator L. Paul Bremer said that statement was a "red herring" — then backtracked when he learned it was Blair who made it.

This year, old soldiers don't fade away, or even retire. Through a "stop-loss" order issued to preserve troop strength, the Army has blocked possible retirements of 40,000 soldiers — including 16,000 National Guard and reservists, reports The Washington Post.

The Karbala attacks on Saturday were the biggest since Saddam's capture Dec. 13.

Bulgaria declared Tuesday an official day of mourning for five Bulgarian and two Thai soldiers killed in the attacks, and Bulgarian Defense Minister Nikolai Svinarov and Gen. Nikolai Kolev, the army chief of staff, were expected in Karbala on Monday to escort home the bodies of the soldiers and wounded soldiers needing treatment at home.

The attacks, which destroyed the Bulgarians headquarters in Iraq, appeared designed to undermine the resolve of U.S. allies soldiering in Iraq.

Six coalition soldiers, six Iraqi police officers and a civilian died Saturday. On Sunday, a Bulgarian lieutenant and five Iraqis wounded in the attacks died in the hospital, the Polish news agency PAP reported.

More than 130 Iraqis and several dozen coalition soldiers were injured, officials said, including five Americans and 26 Bulgarians. Six of Bulgarians are in serious condition, PAP reported.

The latest U.S. deaths bring the number of American combat deaths since the invasion in March to 325.

However, U.S. commanders insist they have Saddam loyalists on the run, and attacks against their forces have dropped to below twenty a day. U.S. forces broke up several pro-Saddam cells in Baghdad last week, and more raids are planned, reports CBS News Correspondent Kimberly Dozier.

Officials said Sunday they arrested five Iraqi suspects in the Karbala attacks.
The military believes the attack was carried out by Islamic militants. Commanders say militants are the next group they have to start studying, to figure out how to stop them. The military admits it still doesn't know how big the militant network is, how it recruits bombers or how it funds its actions, so that will be an urgent intelligence goal, for the new year.

Thailand announced Monday it will send an additional 30 troops to provide security for its other troops. Prime Minister Thaksin Shinawatra said Thailand would fulfill its one-year commitment to the United States and would "not run away from a friend."

The Thai and Bulgarian troops form part of a multinational force of 9,500 soldiers under Polish command.

The Paris Club is owed more than $40 billion by Iraq while Arab countries are owed at least $80 billion. Iraq owes an additional $125 billion in reparations from the 1991 Gulf War, according to the Washington-based Center for Strategic and International Studies.

Japan claims to be the top Iraqi creditor in the Paris Club — a place also claimed by Russia, which estimates it is owed $8 billion by Iraq. Much of the money owed to Japan is tied to hospitals and power stations built by Japanese companies in the 1970s and early 1980s. The government had since assumed the debts.

More from CBS News