PARIS, FRANCE - THE leaders of Syria and Lebanon agreed on Saturday to normalise their fraught relations in a diplomatic coup for French President Nicolas Sarkozy on the eve of a summit to launch a Union for the Mediterranean.

Syrian President Bashar al-Assad, basking in a diplomatic rehabilitation in Europe three years after he was frozen out over the assassination of former Lebanese Prime Minister Rafik al-Hariri, confirmed that the two countries planned to open embassies in each other's capital for the first time.

Speaking alongside Sarkozy and Lebanese President Michel Suleiman, Mr Assad said: 'We can say that Lebanon has moved from being a zone of turbulence, a war zone, to a more pacified zone when the Lebanese, and only the Lebanese, have the right to determine their own future.'

But he said he did not expect such negotiations until President George W. Bush leaves office next January because the current United States administration was not interested in Middle East peace.

Mr Sarkozy called Mr Assad's announcement of diplomatic relations with Beirut 'absolutely historic' and a great step forward for Lebanon, a former French protectorate, but he acknowledged that some legal issues remained to be resolved.

Turkey, Germany positive

Mr Assad's red-carpet welcome in Paris was a stunning turnaround for a leader shunned by Mr Sarkozy's predecessor Jacques Chirac, a close friend of Mr Hariri. Paris believes Mr Hariri's killing was orchestrated from Damascus.

The French leader also claimed credit for bringing together the leaders of Syria and Israel for the first time in the same room at Sunday's launch of the Union for the Mediterranean, grouping 43 Mediterranean and European Union countries.

However diplomats said there were no plans for a handshake or a private meeting between Mr Assad and Israeli Prime Minister Ehud Olmert, and even a group photo seemed improbable.

Senior officials meeting on the eve of the conference failed to resolve differences over how to address the Middle East peace process, a role for the Arab League, and the issue of weapons of mass destruction in a planned joined statement, diplomats said.

But they said there was now consensus that France and Egypt would co-chair the new organisation for the first two years.

Foreign ministers will try to settle the remaining differences on Sunday morning. -- REUTERS