WASHINGTON Ñ The United States should support Russian efforts to reclaim its huge loans to Baghdad as part of the Bush administration's strategy to form a coalition against President Saddam Hussein, a new report recommends.

The Heritage Foudnation said Russia is willing to enter an alliance to overthrow Saddam if Moscow is ensured that its economic interests will not be harmed.

Russia has been trying to get Iraq to repay up to $12 billion in weapons sold to Baghdad in the 1980s, according to Middle East Newsline. So far, Baghdad has offered Russian companies contracts worth as much as $30 billion over the next 20 years to operate and develop oil fields.

The report by researcher Ariel Cohen, said Bush should offer Russian President Vladimir Putin a series of incentives during their summit in St. Petersburg on May 22-23. Cohen said Russian parliamentary leaders and Putin's advisers told the author that Moscow wants to protect its multibillion-dollar interests in Iraq regardless of who is in power in Baghdad.

"But when asked to choose between Saddam's friendship and America's good will, they indicated they would support a U.S. policy to remove Saddam from power," the report said. "At the summit, the Administration should secure Moscow's support by focusing on ways to expand security and intelligence cooperation and to assure the repayment of Iraq's debt to Russia by any future post-Saddam government."

The report cited the significance of Russia's participation in the U.S.-led war in Afghanistan. In that war, Russia provided U.S. troops with what Cohen terms high-quality intelligence was well as weapons to the opposition Northern Alliance.

The report said much of Moscow's support comes from payoffs by Saddam to leading Russian politicians. They include Vladimir Zhirinovsky and his Liberal Democratic Party, as well as Russian business tycoons and former senior officials.

Cohen said U.S. cooperation with Russia on Iraq could be extended to proliferation of missiles and weapons of mass destruction. The report cites accusations by Rep. Curt Weldon, a Pennsylvania Republican, that Moscow has supplied Baghdad with ballistic missile gyroscopes, biological warfare manufacturing equipment, and advanced surface-to-air missiles.

"Washington and Moscow should exchange data on export licenses and illegal arms transfers to Iraq, including WMD procurement through Russian companies," the report said.

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