BUENOS AIRES -- Nestor Kirchner becomes Argentina's President Sunday, inheriting challenges that include guiding the country out of an economic depression and overhauling the military.

Thirteen regional leaders are expected to attend the inauguration. Brazil's Luiz Inacio Lula da Silva, Cuba's Fidel Castro and Venezuela's Hugo Chavez were among those who arrived here late Saturday.

Kirchner, 53, will have to try to ease Argentina back into the good graces of international financial institutions and the international community, and to put behind him the economic and social turmoil that led the country to default on its foreign debt.

Cabinet chief-to-be Alberto Fernandez said that the new president's inaugural address "will set out broad goals" including "an argentina with greater upward social mobility" -- but won't announce specific measures.

Kirchner, a progressive member of the Peronist Party, became president-elect on May 14 when former President Carlos Menem, a staunch free-marketeer trailing in the polls, dropped out of the country's first presidential runoff.

The new president is expected to deliver his inaugural address before both houses of Congress at 3 P.M. (1800 GMT) Sunday. His ministers will be sworn in at about 2030 GMT.

Kirchner, Economy Minister Roberto Lavagna and the rest of the new government must quickly work on the country's economic problems. And the honeymoon is already over with the IMF.

The incoming government has ignored an IMF request to veto legislation that gives consumers who have defaulted on mortgage payments a 90-day grace period.

Lavagna told reporters he had spoken with Kirchner about starting "as soon as possible" talks with the IMF on a new arrangement.

He rejected the idea of additional requirements by the fund ahead of talks, and said Buenos Aires would consider asking IMF Director General Horst Koehler to start new negotiations.

Lavagna appeared Friday with Axel van Trostenburg, the World Bank chief for Argentina, Chile, Paraguay and Uruguay, and announced a credit from the bank for Argentina worth 500 million dollars.

The credit program is to fund the removal from circulation of provincial and federal government bonds that have been used as secondary currencies here, particularly when the peso's value was on the slide. It would also fund some social programs.

Van Trostenburg said the bank had additional resources on the order of 500 million dollars available for Argentina's incoming government, but no further details were immediately announced.

In January, Argentina signed an agreement stretching through the end of August on rescheduling 11 billion dollars in debt to International Financial Organizations. But another three billion dollars comes due to the fund from September. Argentina's foreign debt has spiraled to almost 136 billion dollars. Kirchner has said he favors a strategy of rescheduling debt payments "over decades."

IMF Director General Horst Loehler sent Kirchner a congratulatory letter Saturday, voicing hope that "the current economic program" would be maintained and structural reforms pursued.

A regional powerhouse, Argentina once prided itself on being a rich country with the largest middle class in Latin America.

But as companies went bankrupt and the currency devalued 66 percent, Argentines saw their incomes shrink and unemployment rise. many people formerly considered middle class are now among the almost 60 percent of the 36 million population who live below the poverty threshold.

Local media have reported Kirchner is weighing a military overhaul that could include retiring 27 generals, 13 admirals and 12 brigadier generals, which would amount to a paring of generals' ranks by 75 percent, and cutting 50 percent of both admirals and brigadier generals.