By Stephanie Nebehay

GENEVA, June 28 (Reuters) - Iraq called on Tuesday for an end to a U.N. programme under which it pays compensation for damage from its 1990 invasion of Kuwait and the 1991 Gulf War, arguing debts should be settled bilaterally.

Iraqi Deputy Foreign Minister Mohammed Hamud Bidan spoke to Reuters before addressing the governing council of the U.N. Compensation Commission (UNCC), which uses five percent of Iraqi oil revenues for payouts.

“We suggest we stop the payments of five percent from oil revenues…it is too much for us. We think it is time now to stop and leave Iraq to negotiate directly with the states concerned,” Bidan said.

However, in a speech to the closed-door talks obtained by Reuters, Kuwait called for “political support…to ensure uninterrupted payments”.

It is the last session of the council, composed of the same 15 member states as the U.N. Security Council, to approve further payouts, although those already authorised will take decades to complete.

The Geneva-based commission received $354 billion in claims from individuals, corporations and governments and has resolved about $303 billion. It has approved $52.1 billion in claims so far, of which it has paid out $19.2 billion.

MEGA-CLAIMS

However, final mega-claims are still on the table. Demands for $50 billion in compensation for damage to the environment are being sought by Iraq’s neighbours — Kuwait, Saudi Arabia, Iran, Jordan and Syria — at this week’s three-day session.

The Iraqi delegation held 30-minute talks with Khaled Ahmad Al-Mudhaf, chairman of Kuwait’s Public Authority for Assessment of Compensation for Damages Resulting from Iraqi Aggression.

“Their reaction now was positive but we need to speak about details case by case. Maybe they will accept to speak about government compensation but not individuals,” Hamud Bidan said.

However, the Kuwaiti delegation appeared stunned by the move.

“We do not agree to dropping compensation completely…The issue of compensation is in the hands of the U.N.,” Al-Mudhaf told Reuters.

The Kuwaiti government and parliament would also have to look into compensation issues, he added.

“Kuwait stresses the importance of a dialogue with Iraq under the auspices of the UNCC to reach a conclusion beneficial to all concerned parties,” he said.

A handful of protesters maintained their two-week-old vigil in front of the U.N. European headquarters in Geneva to protest against “the injustice of the war reparations process”.

“If war reparations are not cancelled, they should at least be put on hold so the money that would go to corporations or wealthy countries would instead be invested in meeting basic human needs in Iraq,” said protest leader Kathy Kelly.

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