US President George W. Bush, seeking to mend relations with America's northern neighbor, said yesterday that Canada will be eligible for a second round of US-financed reconstruction contracts in Iraq.

　　In a breakfast meeting with new Canadian Prime Minister Paul Martin, Bush said he had told Martin of the shift in policy. Martin "understands the stakes" in rebuilding a free and peaceful Iraq, Bush said. He offered no details of what the contracts would be worth.

　　It was Bush's second fence-mending session in two days. On Monday, Bush and Mexican President Vicente Fox put aside two years of differences and said they see eye-to-eye about a new US proposal to grant legal status to millions of undocumented workers in the United States, many of them Mexicans.

　　The United States had angered many allies last month by banning firms in countries that had opposed the Iraq war from bidding on Iraqi reconstruction projects. French, German and Russian leaders had protested to Bush, and Canada threatened to stop sending aid to Baghdad.

　　Martin, eager to patch up the cross-border relationship, said he was pleased by the new US stance toward Canada, and the lucrative contracts that could come Canada's way.

　　"It does show that working together, we can arrive at a reasonable solution," Martin told reporters after the breakfast.

　　Bush did not say whether other countries would be affected by the policy shift. But a White House official said French Defence minister Michelle Alliot-Marie would meet with US National Security Adviser Condoleezza Rice on Thursday in Washington

　　Bush and Martin also pledged cooperation on another issue that has irritated US-Canada relations, the discovery of mad cow disease in America from a cow that came from Canada.

　　"This is an issue that's going to require close coordination between our two countries," Bush said. "The best way to make sure we're able to satisfy consumers ... is for there to be (coordination) on regulation, on information and on the science."

　　Bush said he was confident in the safety of the beef supply, and was still himself eating beef.

　　Bush took a firm stance on border security, an issue that has irritated many American neighbors, including Mexico and Canada.

　　"We will do everything we can do to protect our country from attack," Bush said. But he pledged to "work closely with the Martin government on passport issues."

　　"Canada and America have got special status ... by virtue of the fact of a significant interchange on an hourly basis between our two countries," Bush said. "It's special because we share a long border."

　　Bush and Martin met on the sidelines of the Summit of the Americas, where the US president pledged to fight corruption, nurture democracies and work to bring all people in the Western Hemisphere into an "expanding circle of development."

　　But disputes over a free trade agreement that would span the entire region and arguments over proposed penalties for corrupt nations are hanging over the meeting.

　　Before returning to Washington later yesterday, Bush also will meet with Argentina's President Nestor Kirchner, who has said that his nation is no longer interested in "automatic alignment" with US policy. Kirchner, who has been angered by recent US criticism over Argentina's warming relations with Cuba, boldly stated that he would "win by a knockout" at his meeting with Bush. Bush also was meeting with Bolivian President Carlos Mesa.

　　Leaders from Canada to Chile are all calling for a healthier, more-prosperous hemisphere, but they disagree over how best to get there.

　　The differences of opinion notwithstanding, the 34 leaders of the Organization of American States worked hard on Monday in Monterrey, Mexico, to show that relations among individual countries in the region were improving.