A third of the oil proceeds will be earmarked for a compensation fund for victims of the Iraqi invasion of Kuwait.

Last week, the Security Council, over Washington's initial objections, agreed to give Iraq new leeway in spending billions of dollars in oil proceeds.

The work was financed with Iraqi oil proceeds.

But Bush administration officials are hoping that allies, frozen Iraqi funds and even future Iraqi oil proceeds might defray future security costs.

Under the 2005 accord, South Sudan received 50% of the former united Sudan's oil proceeds, which provide the vast bulk of the country's budget.

Iraqi oil proceeds are kept in an account at the Federal Reserve Bank of New York.

He said the money would come from oil proceeds, the nation's disaster relief fund and state government emergency resources.

The money for the reconstruction projects involved in this case came from Iraqi oil proceeds and assets seized from Saddam Hussein's government.

The work was paid for with Iraqi oil proceeds, but the board said it was either carried out at inflated prices or done poorly.

Some of those contracts were paid for with American taxpayer money, but others were financed by Iraqi oil proceeds.