German Chancellor Gerhard Schroeder called today for a speedy removal of UN sanctions o­n war-torn Iraq and warned that terrorism and war must be prevented from evolving into a "new, blanket hatred" that could spark fresh violence.

Schroeder, opening a week-long four-nation Southeast Asian tour, also stressed a key role for the United Nations in rebuilding Iraq as the US sought control of the oil-rich country for at least a year.

"Germany's position is clear. At the end of the war in Iraq, the sanctions can be lifted and we are of the opinion that this should happen speedily and expeditiously," he said at a forum organised by the Institute of Diplomacy and Foreign Relations.

He reiterated that Germany's acrimonious dispute with the United States over Iraq did not jeopardise their "friendly and good ties".

But he said the UN must be cemented as the "central, crucial organisation" o­n the Iraq issue and in international conflicts, despite weaknesses in its administration.

Deeper ties

Schroeder, who arrived here Sunday as the first German chancellor to visit Malaysia since independence, warned the world not to "trivialise" the terrorism threat and said its root causes must be removed.

"Whatever happens, you and we must prevent terrorism and war from giving rise to a new, blanket hatred," he said.

"We must work towards a world where everyone has the opportunity to develop their abilities and share in the prosperity of this planet - in terms of both material wealth and influence."

He also called for deeper ties between the European Union and the 10-member Association of Southeast Asian Nations (Asean), but urged Asean to first "push ahead with their integration."

The German leader, who went ahead with his visit that will also take him to Singapore, Indonesia and Vietnam despite the scare from the deadly Severe Acute Respiratory Syndrome (Sars), dismissed the outbreak as a "theoretical threat" as it has been largely contained in the region.

"After balancing residual risks (from Sars) and the political damage it would bring by cancelling my trip ... I said I'll go anyway," he added.

His delegation has, however, been slashed from 125 to o­nly 30 people, including Economic and Labour Minister Wolfgang Clement.

Red-carpet welcome

Schroeder earlier received a red-carpet welcome at the government administrative capital of Putrajaya where he held "very friendly and fruitful" private talks with Mahathir.

They called for Iraq's reconstruction to be done collectively with "all nations working together through the UN system," Malaysian Foreign Minister Syed Hamid Albar told reporters after delegation meetings.

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

Germany backed France and Russia in opposing any UN resolutions authorising war in Iraq, much to the anger of the United States. Malaysia was also opposed to the US-led war.

Mahathir sought more investment and tourists from Germany and urged its national carrier Lufthansa to fly to Malaysia, as he pledged to send more students there in scientific and technology areas, Syed Hamid said.

The German chancellor'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.

In a boost to Malaysia's aim to be an industrial powerhouse, Schroeder also launched the regional transportation hub for industrial giant Siemens at the Petronas Twin Towers, the world's tallest building.

The two countries also agreed to set up a joint economic commission to boost business ties, Malaysian Trade Minister Rafidah Aziz said after talks with her German counterpart.

Schroeder will have an audience with King Tuanku Syed Sirajuddin before attending a banquet hosted by Mahathir.

He leaves early tomorrow for Singapore. - AFP