European leaders continue to show dismay towards the Bush administration's decision to rule out opponents of the Iraq war from bidding on reconstruction contracts, saying it could hinder US efforts to restructure the country's near $125 billion debt.

French President Jacques Chirac, German Chancellor Gerhard Schroeder and Russian President Vladimir Putin all raised the contracting issue during previously scheduled telephone calls with President Bush yesterday, the White House said.

"Iraq's debt to the Russia Federation comes to $8 billion and as far as the Russian government's position on this, it is not planning any kind of a write-off of that debt," Defense Minister Sergei Ivanov told reporters earlier, responding to a question about the contracts. "Iraq is not a poor country," he said.

Much of Iraq's estimated $125 billion debt is owed to France, Germany, Russia and other nations whose companies are excluded under the Pentagon directive.

Reacting to the international outcry against the decision, the White House said it was not up for reconsideration. The only consola-

tion offered to angry allies was that the Bush administration "will welcome the opportunity to talk to them and explain to them about why this decision was made," White House press secretary Scott McClellan said.

The White House says countries wanting a share of the $18.6 billion in reconstruction contracts in the 2004 US budget must participate militarily in the postwar effort.

"These are countries that have been with us from Day One, these are countries that are contributing forces, that have been making sacrifices and that's why this decision was made," McClellan said. "If additional countries want to participate with our efforts in Iraq, then circumstances can change."

Germany, a leading opponent of the war, called the decision "unacceptable," and government spokesman Bela Anda said it went against "a spirit of looking to the future together and not to the past."

In Moscow, Deputy Foreign Minister Yuri Fedotov said the directive "will hardly foster the mobilization of the international community" to rebuild Iraq, "more likely the opposite," according to the ITAR- Tass news agency.

In Brussels, Arancha Gonzalez, trade spokeswoman at the European Commission, said the EU was asking the United States "to provide us with information so we can see whether or not their commitments" under the World Trade Organization "have been respected."

The Pentagon directive said restricting contract bids was necessary to protect essential security interests. WTO rules allow for exemptions based on national security.