Lebanon appeals to donors, 500 mln dollars hoped for

STOCKHOLM, Aug 31 (Reuters) Lebanon's prime minister, hoping for aid pledges worth 500 million doollar at an international donor conference today, said none of the funds would be distributed by Hizbollah.

Sweden has organised the conference so donors can pledge funds for urgent relief needs such as house building and clearing unexploded bombs, ahead of a bigger gathering later this year on longer-term reconstruction efforts.

''Lebanon, which only seven weeks ago was full of hope and promise, has been torn to shreds by destruction, displacement, dispossession, desolation, and death,'' Lebanese Prime Minister Fouad Siniora told the conference.

He said direct damage to infrastructure and indirect losses such as the loss of tourism amounted to billions of dollars. The government has previously put the figure at 3.6 billion dollars.

Siniora said that if Israel did not withdraw from all its positions in Lebanon, it would undermine recovery efforts. He also called for an end to Israel's embargo on his country.

The European Union has already pledged 54 million dollars for short-term needs. Some 60 governments and organizations are attending the meeting in the Swedish capital, which Sweden has said aimed to raise a further 500 million dollars.

The conference took place amid growing Western worries that cash handouts from Hizbollah to those whose homes were destroyed or damaged in the 34-day war with Israel will entrench the guerrillas' popularity.

Israel began a bombardment of Lebanon after Hizbollah guerrillas captured two Israeli soldiers in a cross-border raid.

The war killed nearly 1,200 people in Lebanon, mainly civilians, and 157 Israelis, mostly soldiers.

Siniora played down any involvement by Hizbollah in the rebuilding process from the funds raised in Stockholm.

''The conference is being called to assist the Lebanese government, all will be channelled through the government,'' he told a news conference. ''This idea that it will be siphoned one way or another to Hizbollah is a phallacy.'' UNEXPLODED BOMBS, HOMES AND OIL SLICK United Nations Deputy Secretary-General Mark Malloch Brown said international support for Lebanon would boost the standing of the central government.

''If we, the international community, fail in supporting Lebanon now, we fail not just the brave Lebanese people but also their national aspiration for a stable, strong and democratic government that reaches, and supports, all its people throughout the country,'' he told the conference.

Lebanese officials told the conference that the priority for spending for short-term relief was on 10,000 pre-fabricated homes to help some of the one million displaced people and make up a shortfall created by the destruction of 30,000 homes.

Another goal was to remove unexploded ordinance, including thousands of cluster bombs.

Yesterday, Siniora said his government would pay 40,000 dollars to each family made homeless so they can rebuild.

Lebanon plans to earmark 52 million dollars for further work on clearing an oil slick that has spread along its coast since the bombing of the Jiyyeh power station last month.

According to UN and Lebanese estimates, Israeli strikes on the plant's fuel storage tanks spilled an estimated 10,000 to 15,000 tonnes of heavy fuel oil into the Mediterranean Sea.

REUTERS LL VC1802