The British Chancellor, Gordon Brown, who is on his first visit to Iraq, has promised an extra £100m to help rebuild the country's economy.
Mr Brown made the commitment when he met British troops and senior politicians in the city of Basra.
Mr Brown's comments came as Downing Street said the views of the British Prime Minister, Tony Blair, were being misrepresented, following an interview on the new Al-Jazeera English-language TV channel.
In an interview with David Frost, Mr Blair had appeared to publicly agree with the opinion that the violence in Iraq since the 2003 invasion had been a disaster.
The Liberal Democrats said Mr Blair had finally accepted the enormity of his decision to go to war in Iraq. However, Downing Street said Mr Blair had not made such an admission on Iraq.
