US hails UAE steps on Iraqi debt, envoy

"The United States welcomes the announcement by the United Arab Emirates to cancel Iraqi debt, appoint an ambassador and reopen their embassy in Baghdad," said US National Security Council spokesman Gordon Johndroe.

"We appreciate the Emiratis' recognition that a secure and prosperous Iraq is in the interests of everyone in the region," he said in a statement as US President George W. Bush attended a summit of rich countries in Japan.

Iraqi Prime Minister Nuri al-Maliki and his government "should also be applauded for their continued outreach to their neighbors, and their efforts to advance a positive agenda through regional diplomacy," said Johndroe.

Washington has long pressed its Middle East allies to do more to help Iraq's debt-saddled economy recover and help anchor the war-torn country in the Sunni Muslim world as a counterweight to mostly Shia Muslim Iran.