WASHINGTON: The Defence Department has agreed to pick up the funding for the covert operations of a leading Iraqi opposition group, sources said on Thursday, apparently resolving a conflict between the group and the State Department that had hampered US planning for the overthrow of Iraqi President Saddam Hussein.

The decision to shift some funding for the Iraqi National Congress, a London-based umbrella group, to the Defence Department was reached last week about the same time that State and Defence issued a joint invitation to six leaders of Iraqi opposition groups to visit Washington.

The meeting, which is scheduled for next week, is aimed at ending chronic fighting among the rival groups.

State and Defence officials declined to comment on the funding deal, saying it involved sources of intelligence. But various sources close to Iraqi opposition groups described the agreement, saying it marked another milestone in the administration’s efforts to forge a common opposition front against Saddam.

“This is yet more evidence that the administration is really serious about using the opposition as part of its Iraqi strategy,” said Danielle Pletka, vice president for foreign and defence policy at the American Enterprise Institute.

“This new mechanism is a serious, high-level shift in administration policy,” said one source. “They have finally made up their minds.”

The State Department and the INC have squabbled over funding for the group, especially its use of US money to lure defectors and gather intelligence from Iraq. The State Department, citing alleged accounting irregularities, has withheld about $8 million from the INC until a spending agreement is reached.

The State Department rarely paid much attention to the information obtained by the INC, believing it was unreliable. But defence officials have been more receptive to it, and the INC sometimes shopped it to the Pentagon first, leaving State Department officials wondering why they were paying for it.

The administration’s Iraq policy was discussed for a second day before the Senate Foreign Relations Committee on Thursday. Iraq experts raised questions about the state of the administration’s planning for a post-Saddam government should it carry out its threats to topple the Iraqi leader, through military force if necessary.

Witnesses said that, before a military campaign, the administration has to address questions about future Iraqi leadership, how to create democratic institutions in Iraq and the extent of post-war US security and financial commitments to the country.

Phebe Marr, a government expert on Iraq for more than 20 years, most recently at the National Defence University, said the exile leadership groups would provide pro-US leadership in Iraq.—Dawn/The Washington Post News Service.