The United Nations Security Council faces contentious US demands that UN controls be struck entirely from Iraq's oil-for-food plan.
US President George W. Bush has said several times he wants the sanctions, imposed in 1990, lifted. Diplomats said the United States was crafting a resolution that would guarantee that proceeds from future oil sales be held in trust for an interim Iraqi authority rather than the United Nations.
The consequences of any resolution would be to free oilsales and give the United States firm control over contracts and expenditures until an Iraqi government is in place, diplomats said.
Without Security Council endorsement, no oil firm will sign a contract with an entity that has no legal standing.
The Security Council yesterday renewed emergencyprocedures, first instituted on March 28th, for the oil-for-food plan until June 3rd, the end of the program's current phase.
Currently, the program has some $14 billion in funds. Thecouncil authorised UN Secretary-General Kofi Annan tosend emergency health and food supplies to Iraq. Some $400million worth of goods are en route to Iraq and an additional$130 million are expected by June 3rd.
The oil-for-food program, originally designed to ease theimpact of the sanctions, puts Iraq's oil revenues into a UN account, which pays suppliers of food, medicine and a host of civilian goods that Iraq ordered.
Russia this week floated its own informal plan that wouldleave the United Nations in firm control of Iraqi oil revenues until a new government was recognised. France suggested sanctions be suspended but not lifted immediately and that theUN oil-for-food program be phased out gradually.
To assuage fears that the United States and Britain aregrabbing Iraq's oil, the United States plans some kind ofinternational oversight, but not from the United Nations,diplomats said.