Lebanon upbeat about aid talks despite opposition

BEIRUT, Jan 12 (Reuters) Lebanon's government was upbeat today that an international donors conference would go ahead as scheduled despite a political crisis and domestic opposition to the talks.

Beirut hopes a conference in Paris on January 25 will bring in billions of dollars of much needed aid for an economy reeling from a war with Israel in July and August and shouldering a 41 billion dollars public debt.

But Prime Minister Fouad Siniora's government is facing a challenge from the Hezbollah-led opposition which has vowed to oust him if he does not give them veto power in a national unity government or call early elections.

Siniora, backed by the United States and Saudi Arabia, has resisted those demands, and the impasse has hurt Lebanon's recovery and raised fears the aid conference could be postponed or cancelled.

Nonetheless, the Lebanese economy and finance ministers and the central bank governor travelled to Paris this week to discuss their country's economic reform plan with main donors.

''The two ministers (economy and finance) stressed that the first indications, and after two days of negotiations, were positive,'' Information Minister Ghazi Aridi said after a cabinet meeting. ''And the participants praised the programme that Lebanon presented for the conference.'' The reform plan includes tax rises and privatisation in the mobile telecom sector -- both issues rejected by the opposition-backed, main labour union confederation, which protested outside government buildings earlier this week.

The two-day protests were part of a wider, six-week campaign which Iranian- and Syrian-backed Hezbollah has spearheaded to oust Siniora's government. Protesters have camped outside his heavily fortified offices in central Beirut since December 1.

Siniora will also begin a tour of Egypt and Gulf Arab states from Saturday to discuss Arab contributions to the conference.

Economy and Trade Minister Sami Haddad said in November that Lebanon hoped to receive over four billion dollars from donor countries.

Reuters BDP RN2145