CAIRO Ñ As a policy debate rages at top levels in the Bush administration over attacking the regime of President Saddam Hussein, Egypt is moving to improve relations with Iraq.

Egyptian diplomats said President Hosni Mubarak plans to raise the level of representation between Baghdad and Cairo to the level of ambassador. They said diplomatic ties would be raised commensurate to the level of trade relations.

Egypt has refused to participate in a U.S.-led military coalition against any Saudi billionaire fugitive Osama Bin Laden or any of his government sponsors. Instead, Mubarak has called for a United Nations-sponsored conference on international terrorism, Middle East Newsline reports.

Egypt has sent a new charge d'affaires to Baghdad. He is Hussein Zoghbi, a 59-year-old former ambassador to Eritrea.

In an interview to the Egyptian official Middle East News Agency, Zoghbi said Egyptian-Iraqi relations would soon be renewed at the level of full diplomatic ties. He said such relations are developing in cooperation with Iraq.

Egypt and Iraq have agreed to increase trade relations, including the establishment of a free trade zone. Iraq has also agreed to increase the number of Egyptian laborers in the country.

Zoghbi said his job would focus on representing Egyptian nationals in Iraq.

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