The construction and engineering giant Bechtel Group of San Francisco has been awarded a wide-scale contract by the Bush administration to rebuild Iraq's vital infrastructure, including roads, buildings, sanitation systems, electrical grids and airports, Conor O'Clery North America Editor reports.
The contract, granted by the Agency for International Development, comes as the US continues to shut out the United Nations from any central role in the reconstruction of post-war Iraq.
The UK, the US's chief partner in the war coalition, has also been excluded from reconstruction contracts, as only US firms were invited to tender, a decision that has upset some British companies.
The award to Bechtel, the largest in a series of US government contracts, involves an initial $34.6 million for construction work and could go as high as $680 million by the end of 2004.
Bechtel is well connected with the Republican administration in Washington. President George Bush appointed its chairman and chief executive, Mr Riley Bechtel, to his President's Export Council in February.
One of its directors is Mr George Shultz, who was secretary of state under President Ronald Reagan.
The 50,000-employee company also has a long history of doing business in Iraq, including an unsuccessful pipeline deal which was a topic of discussion at a 1983 meeting between Mr Donald Rumsfeld, now Defence Secretary, and President Saddam Hussein.
Under the contract Bechtel may also be responsible for the repair and reconstruction of hospitals, schools, government buildings and "essential transport links."
The Bush administration hopes much of the billions of reconstruction money required, initially from US taxpayers, will come from the export of Iraqi oil. But new oil sales cannot be authorised until the United Nations lifts sanctions imposed on Iraq since the 1991 Gulf War.
Under Security Council resolutions the lifting of sanctions is linked to UN certification that Iraq's weapons of mass destruction have been destroyed.
However, the US is resisting a request from the chief UN weapons inspector, Dr Hans Blix, to send a team back to Iraq.
Security Council ambassadors met informally on Thursday afternoon to debate whether the UN will be able to play an active role in post-war Iraq or just a humanitarian one. So far the Bush administration has not made specific proposals about a UN role other than to call for a lifting of the sanctions.
"We know and we recognise that there are many differences, and there are sharp contrasts in points of view in the council," Mexico's UN Ambassador, Mr Adolfo Aguilar Zinser, the current council president, said. "That's why we have to \ an extraordinary effort to bring the council together."
The failure of the US so far to find weapons of mass destruction in Iraq will be taken up by the Security Council on Tuesday, and President Vladimir Putin of Russia has called on Dr Blix to tell the session how soon his inspectors might be able to resume the hunt.
Pressure is mounting on the US to prove the presence of WMD, the prime reason given by the Bush administration for the war, but the White House has said it is not yet time to discuss the return of UN inspectors.
"Digging it out, ferreting it out is going to take some time," said the official. "It's going to be difficult, it's not going to be a cakewalk." Dr Blix told the BBC on Thursday his inspectors could give the world "a credible report on the absence or the eradication of the programme of weapons of mass destruction."
EU leaders have rejected President Bush's call for a lifting of sanctions without a new Security Council resolution that would give the UN a central role in the administration of post-war Iraq.
The manoeuvring over sanctions is tied up with the access Security Council countries like France and Russia seek in securing contracts for rebuilding Iraq's infrastructure.