WASHINGTON, Oct 21: The White House on Tuesday threatened to veto an 87 billion dollars bill for military operations and reconstruction in Iraq if Congress keeps a Senate-passed provision to convert 10 billion dollars of the package into loans.

The chairman of the House of Representatives Appropriations Committee said he was confident the loan provision would be eliminated when a House-Senate conference meets to reconcile differences in their two versions, enabling a final measure to be sent to President George Bush.

“I believe the House position will prevail. We are determined to support the president,” said Representative Bill Young, a Florida Republican.

But sentiment remained strong among lawmakers in both chambers to make Iraq repay a portion of the 20 billion dollars Mr Bush wants for Iraq’s reconstruction from its future oil revenues.

White House budget director Joshua Bolten, in a letter to the House and Senate appropriations committees, said the president’s senior advisers would recommend a veto if the loan was not dropped from the final bill.

“Including a loan mechanism slows efforts to stabilize the region and to relieve pressure on our troops, raises questions about our commitment to building a democratic and self-governing Iraq, and impairs our ability to encourage other nations to provide badly needed assistance without saddling Iraq with additional debt,” Mr Bolten said.

The Senate last week narrowly voted to make 10 billion dollars of the package into loans, while the House narrowly defeated a similar measure pushed by Democrats. House Republican leaders had manoeuvred to prevent a vote on a Republican loan plan. —Reuters