The accord on "mutual protection of secret information in the defence sphere" signed last week by Foreign Minister Anatoly Zlenko and US ambassador Carlos Pascual "is a new step towards strengthening confidence and the development of bilateral relations," foreign ministry spokesman Markian Lubvisky said.

It must first be ratified by the Ukrainian parliament and the US Congress before it comes into force, the spokesman said.

US-Ukraine relations reached a low ebb last year following alleged sales -- denied by Kiev -- of sophisticated radar systems to the Saddam Hussein regime in Baghdad, but improved somewhat after Ukraine backed the US position over an invasion of Iraq.

Washington reduced its aid to Ukraine by several million dollars as a result of the cooling in relations.

Last week however US President George W. Bush thanked Ukraine for sending troops to take part in the stabilisation force in Iraq and pledged to help Kiev in its efforts to join NATO and the European Union in letter

WAR.WIRE