German Chancellor Gerhard Schroeder and Prime Minister Dr Mahathir Mohamad today called for a United Nations (UN) role in rebuilding war-torn Iraq and backed an independent Palestinian state to restore peace in the Middle East.

Schroeder, the first German chancellor to visit Malaysia since independence, held private talks with Mahathir as he opened a week-long Southeast Asian tour to bolster trade and economic ties.

"Both leaders reaffirm their committment to the UN and the need for multipolarity in the world system," Foreign Minister Syed Hamid Albar told reporters after delegation meetings at the government administrative capital of Putrajaya.

"They agree that without the establishment of a Palestinian state, there can be no lasting or durable peace in the Middle East."

German tourists

On the reconstruction of Iraq, Syed Hamid said the two leaders expressed hope that it would be carried out collectively with "all nations working together through the UN system".

They also called for all future conflicts to be resolved through dialogue to ensure world stability, he said.

Germany emerged o­n the side of France and Russia in opposing any UN resolutions that would authorise war much to the anger of the United States. Malaysia was also opposed to the US-led war in Iraq.

Syed Hamid said the two leaders held "very friendly and fruitful" talks, during which Schroeder praised the veteran Southeast Asian leader for his role in developing Malaysia and in the international arena.

Germany is Malaysia's largest trading partner in the European Union but the 77-year-old Mahathir sought more investment and pledged to send more students there in scientific and techology areas, he said.

"The prime minister told Schroeder that Malaysia wants more German tourists to Malaysia and urged the national carrier, Lufthansa, to fly to Malaysia," he said.

"In reply, Schroeder said there must be more promotion centring o­n the beauty and safety of Malaysia to attract more German tourists."

Smaller delegation

Schroeder's visit here comes just 14 months after the long-ruling Malaysian premier visited Berlin, and ahead of Mahathir's resignation in October after 22 years in power.

The German chancellor earlier received a red-carpet welcome and inspected a guard of honour at Putrajaya where he was greeted by Mahathir, cabinet ministers and diplomats.

He arrived here Sunday o­n the first leg of a visit that will also take him to Singapore, Indonesia and Vietnam despite the scare caused by the deadly Severe Acute Respiratory Syndrome (Sars) outbreak.

His delegation has however, been slashed from 125 to o­nly 30 people, including Economic and Labour Minister Wolfgang Clement and the head of industrial giant Siemens, Heinrich von Pierer.

Schroeder will open the Siemens centre in the Petronas Towers, the world's tallest building, and give a speech to the Institute of Diplomacy and Foreign Relations later today.

High trade

He will also have an audience with King Tuanku Syed Sirajuddin and attend a banquet hosted by Mahathir.

Germany's trade volume with Southeast Asia is higher than with the United States, and is o­ne reason why the chancellor decided not to call off the trip despite the ravages of Sars, which has hit the four states he is visiting.

Officials said Schroeder's trip was primarily a trade mission to push German participation in projects in Southeast Asia and to woo more investment.

In Malaysia, he is expected to press the case for Siemens to be given a large share in a 1.7-billion euro project to build a 680-kilometre fully electrified railway from the Thai border to Singapore. AFP