RIYADH Saudi billionaire Prince al-Walid bin Talal bin Abdul Aziz on Monday ruled out investing in sanctions-hit Iraq, but said he would invest in Iran at President Mohammad Khatami's behest.

"I have received an invitation from Uday Saddam Hussein, elder son of the Iraqi president, to visit Iraq and invest there but I rejected the proposal," AFP quoted Prince Walid as telling a press conference in Riyadh.

The prince said he had received "a similar invitation from Iranian President Mohammad Khatami, to which I will respond favorably."

Relations between Tehran and Riyadh has greatly improved after the 1997 election of President Khatami.

The two countries on April 17 signed a security pact to fight drug trafficking and terrorism after two years of negotiations, predicting it would enhance regional security as well as their growing relations.

The prince stressed that he "had no investments in Israel ... conforming to the policy of Saudi Arabia," which does not have diplomatic relations with the Zionist state.

Walid, 43, a nephew of King Fahd, runs the kingdom holding group with worldwide investments and said Monday he has amassed a personal fortune of 20.3 billion dollars.

The prince, ranked as the world's fifth wealthiest entrepreneur by the U.S. magazine **** Forbes***, built his global financial empire by investing in major companies experiencing hard times.