Iran offered on Friday to help Iraqi reconstruction efforts by offering its former enemy an oil swap arrangement that could help Baghdad boost crude export revenues.

Iranian Foreign Minister Kamal Kharazzi also promised a credit facility of up to $300 million and offered cross-border electricity and gas supplies.

"We stand ready to supply our electricity and gas to Iraq and to facilitate its oil exports through our oil terminals or enter into a swap arrangement that can amount to 350,000 barrels per day," Kharazzi said in the text of a speech he is due to deliver to a donors' conference on Iraq.

The offer is Tehran's most significant commercial advance since the March U.S. invasion of Iraq but the initiative is unlikely to receive a welcome from Washington.

"We have envisaged a comprehensive package of economic cooperation comprising development aid, investment, trade, tourism, project financing and so on," Kharazzi's text said.

The United States accuses Tehran of seeking to develop nuclear weapons and has blocked Iran's efforts to get western commercial backing for a major pipeline from Kazakh and Azeri oil developments in the Caspian Sea across Iran to its Gulf export terminals.

Former Iraqi leader Saddam Hussein waged a war with Iran from 1980-1988, financed in part by Western powers, after the Iranian revolution of 1979.

Iran already runs a modest swap program with Caspian producers, compensating them with supplies from its Persian Gulf terminals, and plans to boost the arrangement with a new line from the Iranian Caspian port of Neka to Tehran refinery.

An oil swap arrangement with Iraq would be designed to permit Baghdad to deliver crude across its eastern border to Iranian refineries, oil dealers said. Iran in return would export an equivalent volume of Iranian crude on Iraq's behalf from the Persian Gulf.

Iraq has struggled to lift oil exports to pre-war volumes because of sabotage attacks on its northern pipeline through Turkey which has yet to reopen.

In another development Kharrazi said that the United Nations' playing a pivotal role in Iraq was a necessity as well as establishment of a lawful and elected government in Iraq for improving situation in that country.

Addressing the International Donors' Conference For the Reconstruction of Iraq which is held here with participation of the representatives of over 100 countries and international bodies and organizations, he stressed that Iran, as a neighboring country with appropriate economic capacities, will contribute to reconstruction process in Iraq.

He further voiced the readiness of his country to cooperate with Iraq in investments, commerce, tourism, financial affairs and development areas.

Kharrazi further noted that establishment of a peaceful and stable government in Iraq would benefit all regional countries especially its neighbors.

He also noted that the memory of the crimes committed against Iran and Kuwait and the wounds inflicted on these countries by the former Saddam Hossein regime were still fresh in minds.

However, he went on, everybody should help Iraqi nation to determine its own destiny and to speedily form an independent government there.

"For these reasons, Iran attaches great importance to peace, security, stability, development and economic prosperity in Iraq," the foreign minister added.

Referring to the Madrid meeting as an opportunity for expressing solidarity with Iraqi nation in establishing a "free, responsible and democratic" Iraq, he expressed hope that the country established good and constructive ties with its neighbors as well as international community.

The conference will also focus on other issues including communications, public services, transportation, environment and health in several sessions.