GEORGE W BUSH'S hopes of Tony Blair delivering a last-minute deal for a new United Nations resolution on Iraq were dashed by France yesterday.

Chirac is unwilling to deliver any concession that would retrospectively give international legality to the war and allow the US occupying forces to decide on their terms alone when Iraq was ready to take back its own affairs.

The US president had hoped that Blair could persuade French President Jacques Chirac and German Chancellor Gerhard Schroeder to back a new US-backed UN Security Council resolution on Iraq to "internationalize" the occupation of Iraq before he addresses the UN general assembly on Tuesday.

However, Blair failed to heal the gulf, with Chirac insisting that "we still do not agree on Iraq" and that he would only give his support if there was a swift return "within a few months" of sovereignty to the Iraqi people under UN auspices and not that of the US.

The White House is said to be furious with Chirac since France, as one of the five permanent members of the UN's 15-strong Security Council, can veto any bid by the US to pass a new resolution on Iraq.

The three leaders, meeting yesterday in the chancellery in Berlin, offered a show of unity after the trilateral talks that only exhibited its fragility when the trio were asked to comment on Iraq during a press conference. Blair tried to put on a show of unity for reporters. "Whatever the different positions on the conflict, they can be resolved and I'm sure they will be, the entire world has an interest in seeing these things happen."

But Chirac would have none of it. He responded by saying: "We still do not agree fully on Iraq. There's not much point saying we slightly disagree on this topic - but France feels we have to take a turn in the way things are done."

Chirac is unwilling to deliver any concession that would retrospectively give international legality to the war and allow the US occupying forces to decide on their terms alone when Iraq was ready to take back its own affairs.

The US believes Chirac's timetable is unrealistic and, if implemented, would result in further chaos in Iraq.

Schroeder indicated that Germany was ready to heal its diplomatic rift with the US. "We want to give a more prominent role to the UN" in Iraq's transition to democracy, he said. He wants the process of transition in Iraq to be discussed first and the timetable later.

However, the US unwillingness to turn over any power to the UN, and its reluctance to discuss a short-term timetable returning sovereignty to Iraqis, is clearly unacceptable to Chirac.

Yesterday's setback for Blair follows on from the by-election loss at Brent East last week. This week he also faces further fallout from the Hutton Inquiry when Defense Minister Geoff Hoon, and former Communications Director Alastair Campbell are recalled. The following week he faces a potentially hostile Labour Party conference in Bournemouth. Blair would like to get back to an agenda of domestic success, but Iraq is still draining his political resources.

For Bush, the inability of "Envoy" Blair to come up with some compromise deal in Berlin is perilous. Bush wants the international community to share the rising costs .

The $87 billion dollar request Bush recently lodged with Congress in Washington to pay for the occupation is now seen by many in his re-election campaign team as a tightening noose that does not sit easily alongside the administration's $450 billion deficit estimate for this year's budget. Any "internationalization" of the occupation, including costs and military manpower, would have seen that noose slacken.

The latest talks took place against the backdrop of the latest in a string of attacks on Iraqis co-operating with the occupying forces .

In Baghdad yesterday attackers fired on a car critically wounding Akila al-Hashemi, a Shi'ite Muslim and career diplomat, and one of three leading women members of Iraq's Governing Council.

Meanwhile Russian President Vladimir Putin also added to the diplomatic uncertainty yesterday, saying that while Russia does not rule out contributing military personnel to any international force in Iraq, it is not on the agenda at the moment. "It doesn't matter who is at the head of the operation; it could be the American military ," he said.

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