Sarkozy heads to Algeria under cloud of 'Jewish lobby' row

PARIS (AFP) — French President Nicolas Sarkozy heads Monday to Algeria to put the seal on multi-billion-euro oil and gas contracts, amid a row over remarks by an Algerian minister about alleged ties to the "Jewish lobby".

Sarkozy, who dismissed calls to cancel his second trip to the former French colony since his election in May, has said he considers the matter closed following talks with the Algerian president.

Abdelaziz Bouteflika firmly disowned comments by his veterans minister last week that Sarkozy owed his election to the "Jewish lobby", citing in particular Foreign Minister Bernard Kouchner, who is half-Jewish. Sarkozy's maternal grandfather was Jewish.

The comments "in no way reflect Algeria's views" and Sarkozy -- travelling with some 100 French business leaders and seven ministers -- would be received "as a friend," Bouteflika said.

But the incident put a fresh strain on relations between Paris and its former colony, which have been tested by France's refusal to recognise crimes it has been accused of committing under its 1830-1962 colonisation of Algeria.

In an interview published Sunday by the Algerian news agency APS, Sarkozy said it was time for both countries to "turn towards the future" and "reconcile their memories."

Sarkozy's office said he hoped to relaunch talks on a simplified treaty of friendship, shelved over France's refusal to apologise for its "crimes."

"I think we first need to turn towards the future, because the younger generations, who make up the great majority of your country's population, are not going to wait for their elders to settle the problems of the past."

Sarkozy, whose insistence that France should no longer "repent" for its colonial past has antagonised some in Algeria, said he wanted to give "a new breath of life, a new dynamic to our relations with the countries of the south Mediterranean."

He repeated his calls for the creation of a Mediterranean union spanning southern Europe and north Africa, saying that oil- and gas-rich Algeria would be an "essential partner".

Sarkozy also announced plans for a raft of contracts and investments, including for French energy giant Total to invest 1.5 billion dollars (one billion euros) in a new oil refinement facility.

Gaz de France was also to invest one billion dollars in the Touat gas field in the Algerian Sahara, and extend its supply contracts with Algeria, the third gas supplier to France after Norway and Russia, until 2019, he said.

"France has become the biggest investor in Algeria outside the hydrocarbons sector, and it could soon become the biggest investor full stop thanks to the projects of our big companies," Sarkozy said.

"The contracts we hope to see signed or confirmed during my visit could directly represent up to 7,000 new jobs in Algeria," he said.

Sarkozy also said there were plans for a nuclear cooperation agreement, following a similar agreement signed with Morocco last month.

On Monday, Sarkozy is set to hold the first of several meetings with Bouteflika in Algiers followed by talks with French and Algerian businessmen.

Tuesday he travels to the World Heritage archaeological site of Tipaza, 70 kilometres (40 miles) west of Algiers, followed by a visit to a sanctuary for heroes of Algeria's 1954-1962 war of independence from France.

He then joins Bouteflika for lunch, signing a series of agreements, before meeting Algerian personalities and the French community of Algiers.

On the final day of his visit, Sarkozy travels to Constantine, 400 kilometres east of Algiers, to deliver a speech to students, before flying home to Paris.

Sarkozy had faced calls to cancel his trip after the comments by veterans minister Mohamed Cherif Abbas in a newspaper interview, which sparked outrage among French politicians, rights groups and Jewish organisations.

On Sunday, the head of the opposition Socialist Party, Francois Hollande, called on Sarkozy while in Algeria to condemn the anti-Semitic insinuations.

"These comments are inexcusable, unacceptable and reprehensible," Hollande said on France 5 television.