Iraq's Maliki calls on Saudis to invest in Iraq

JEDDAH, Saudi Arabia, July 2 (Reuters) Iraqi Prime Minister Nuri al-Maliki today called on Saudi businessmen to invest in Iraq, after talks with Saudi leaders on improving border security to help squash an insurgency.

Maliki's Shi'ite Muslim government is seeking support for a national reconciliation plan which aims at ending the three-year-old Sunni Muslim insurgency and communal bloodshed between Shi'ites and minority Sunnis.

''The security problems are not in all of Iraq, they are confined to Baghdad,'' Maliki reassured businessmen, inviting Saudi firms to seek contracts in infrastructure projects.

He said Iraq and Saudi Arabia were looking into reopening the Arar border crossing to allow commercial links to develop.

The economy of Saudi Arabia, the world's top oil exporter, is booming because of high world crude oil prices.

''We are trying to cancel the socialist vision of things in Iraq... We are preparing a new law on investment that will be applied soon,'' he said, describing liberal economic policies contrary to the state control of previous Baath party rule.

Saudi businessmen have had to find circuitous trade routes to Baghdad ever since the border was closed following Iraq's 1990 invasion of Kuwait.

Maliki, who made a pilgrimage to Mecca earlier on Sunday, is on his first foreign trip since being sworn in as prime minister on May 20. His delegation, which includes several government ministers, will also visit Kuwait and the United Arab Emirates.

Saudi state television said on Saturday Maliki had discussed efforts to improve the security situation in Iraq with Saudi leaders. A member of the Iraqi delegation said the talks included improving border security to stop Saudis entering Iraq.

Saudi Arabia is the home of the puritanical Wahhabi school of Sunni Islam which inspires many of the foreign and Iraqi militants fighting under the aegis of al Qaeda to overthrow Maliki's government and expel the U.S. forces backing it.

Many Saudis are thought to be among hundreds of Arabs who have gone to Iraq to fight U.S.-led forces since Washington invaded the Arab state in 2003 and brought to power Shi'ite Muslims, who are seen as heretics by Wahhabis.

Saudi officials have warned of militants returning to join a parallel effort by Saudi al Qaeda sympathisers to topple the Saudi royals, also despised for their close alliance with the United States.

REUTERS CH BST1730