"At this moment a major delegation from the Iraqi defence ministry is in Poland and visiting production sites," Jerzy Szmajdzinski said, according to the Polish PAP news agency.

"Difficult negotiations are in progress."

In September the Polish arms manufacturer Bumar signed a deal worth 53 million dollars to supply weapons and ammuntion to the Iraqi army.

"The new contracts would multiply that value," the minister said, refusing to give details of the Iraqi delegation's visit.

"I would like the negotiations to be successfully concluded," he explained.

Bumar said last month it was negotiating a possible deal to update Iraq's Russian-made T-72 battle tanks and sell Baghdad helicopters.

In May it lost out to the US ANHAM group in a contest to close a deal with the Iraqi army worth 425 million dollars.

Poland is a backer of the US-led intervention in Iraq and administers a zone in the south of the country at the head of a 6,500-strong force, 2,500 of them Poles.

President Aleksander Kwasniewski has said Warsaw wants to withdraw its troops from Iraq during the course of next year, adding that no firm withdrawal date had been decided.

Poland is the fourth largest troop contributor to the US-led forces in Iraq, but there is strong opposition to the deployment at home.