WASHINGTON, Dec 15 (AFP) - US President George W. Bush told Italian Prime Minister Silvio Berlusconi Wednesday that he hoped to see the weak dollar rise on world markets, and warned Iran and Syria against "meddling" in Iraq.
"We will continue to make it clear, to both Syria and Iran, that -- as will other nations in our coalition, including our friends the Italians -- that meddling in the internal affairs of Iraq is not in their interest," Bush said.
His comments came after Iraq's Defense Minister Hazem Shaalan accused those two countries of orchestrating terrorist attacks in Iraq, branding Tehran in particular the "most dangerous enemy of Iraq".
Berlusconi lavished praise on his host as a frank leader -- "'yes' really means 'yes' to him, and 'no' means 'no'" -- and promised any help necessary to repair trans-Atlantic ties and try to bring about peace in the Middle East.
"I wanted to reassure President Bush that I will make any possible effort to strengthen the relationship between the United States of America and Europe," the prime minister said during a joint public appearance at the White House.
Bush, scheduled to make a fence-mending visit to Europe in February, acknowledged Berlusconi's "concerns" about the dollar's weakness against the euro, but said financial markets should decide currency values.
"We'll do everything we can in the upcoming legislative session to send a signal to the markets that we'll deal with our deficits, which hopefully will cause people to want to buy dollars," said the president.
For the US economy, the dollar slide is not all bad: "Made in USA" exports are now comparatively cheaper than their competition -- notably from Europe, where the euro has hit historic highs against the US currency.
Berlusconi did not mention the currency issue, but he said recently that "the dollar must not be too weakened compared to the euro because that creates the risk of damaging trade relations between the two sides."
Bush and the prime minister, who staunchly backed the US-led March 2003 invasion of Iraq to toppled Saddam Hussein, also discussed efforts to quiet deadly violence there ahead of elections set for January.
Italy has a 3,000-strong military contingent deployed as part of coalition forces.
The leaders seemed to agree that prospects for ending the Arab-Israeli conflict have brightened, with Berlusconi saying "we agreed on the fact that it is now the appropriate time to solve the Middle East issue."
"We talked about peace between Israel and the Palestinian Authority. I think there's a very good chance that we can achieve that peace. I look forward to working toward that end," said the president.
They also discussed how to improve trans-Atlantic relations strained by the war in Iraq -- a goal he has publicly made a priority of the second four-year term he won in November 2 US elections.
"I've got work to do in Europe. He gave me some very good advice about my upcoming trip," said Bush.
Berlusconi endorsed Bush's call for overhauling international organizations, including the United Nations, where Rome would like to see the entire European Union as a bloc given a permanent seat on a reformed Security Council.
Italy fears being relegated to second-class status within the European Union if Germany is ever given a seat as a permanent member of the UN Security Council -- joining two other EU countries, France and Britain.
Meanwhile, Foreign Minister Michel Barnier of France -- which saw relations with the United States sour when it opposed the war in Iraq -- was to meet separately with outgoing US Secretary of State Colin Powell and national security adviser Condoleezza Rice, whom Bush has chosen to succeed him.
The US president said in a December 1 speech in Canada that he would try to repair trans-Atlantic ties, while serving notice that it would be mostly on Washington's terms.

12/15/2004 20:17 GMT - AFP