"The general philosophy of the text remains to target Iran's nuclear and missile programmes, as well as the institutions that are running them and the individuals in charge," he said.

"We shall see how the European project is received," Mattei said, stressing the "need for caution in this matter".

If Moscow, Beijing and Washington give their agreement, the matter will return to the Security Council, he said.

World powers have been debating a draft UN resolution that would impose limited sanctions on Iran over its failure to comply with an earlier UN resolution on halting uranium enrichment.

Mattei said contacts were taking place both within the framework of the Security Council and among the six global powers - Britain, Germany, France, Russia, China and the United States.

Until now, Russia and China had considered the European proposals for trade and economic sanctions against Iran too tough, while the United States felt they did not go far enough.

But the enclave remains isolated after the expulsion of all French diplomats and state employees, and faces the prospect of more anti-France demonstrations like one that took place Monday outside the empty embassy.

Many were gloomy. "What will we do about our papers? Renewing passports?" asked one French woman, who like all those interviewed by AFP demanded anonymity citing fears of retribution.

Most in the community of missionaries, aid workers and businesspersons wondered if they would be able to weather the storm of anti-French anger that some fear could rise to the level of that in Ivory Coast.

"For us this is a sad affair," said one Frenchman, who has lived in Rwanda for less than a year. "We don't feel directly threatened or in danger, but there is tension."

He noted that the situation was not as grave as in Ivory Coast where rampaging mobs attacked French citizens, businesses and other interests in November 2004, forcing the evacuation of some 8,000 expatriates.

"The authorities are controlling the people and seem not to want the situation to get out of hand, but perhaps one day we private French citizens will have to leave," he said.

Kigali on Friday severed diplomatic and cultural relations with France and gave French diplomats and state employees 72 hours to leave Rwanda as a major row over the events leading up to the genocide boiled over.

The breaking point came when France's top anti-terrorism judge said Rwandan President Paul Kagame should face trial for the assassination of his predecessor and issued arrest warrants for nine of his close aides.

Within days of Judge Jean-Louis Bruguière's announcement, 25,000 Rwandans rallied to denounce him and the alleged French complicity in the genocide in which some 800,000 people - mainly minority Tutsis - were killed.

Police dispersed Monday's protest outside the embassy, but with Kagame and senior Rwandan officials continuing to denounce France for being anti-Rwandan and involved in the genocide, the French community here is in a quandary.

Foreign Minister Charles Murigande says only French government employees are affected by the expulsion order.

"Only those working in government departments, be it the cultural center or the French school, should pack their bags and go," he told a Belgian newspaper. "But a Frenchman who sells bread or wine can stay."

Still, many are fearful that Rwandans venting anger may not always make that distinction.

During Monday's protest by a group of genocide survivors, marchers chanted anti-French slogans such as: "Who brought you misery? A Frenchman!"

Some in the French community believe the animosity is based in part on language, with the English-speaking Kagame - who fought against the francophone government in the former Belgian colony - convinced of French duplicity.

"There is a rivalry between francophone and anglophone Rwandans," said a cleric. "The anglophones, who came from Uganda like President Kagame, are fuelling the anti-French sentiment."

"For anglophones, France is the enemy that supported the Habyarimana regime," he said, referring to the former Rwandan president Juvenal Habyarimana whose death touched off the genocide and which French judge Brugiuère is investigating.

"With the Bruguière affair, they have the impression that France is still fighting them," the cleric said, adding that many Rwandans believe the arrest warrants are a cover for hiding France's complicity in the genocide.

The judge is investigating the downing of Habyarimana's plane on April 6, 1994 and accuses Kagame, then a rebel leader, of orchestrating it. Several French crew members were killed in the incident, prompting the French inquiry.

Kagame, who has always denied any role in the incident, has called the judge's allegations "rubbish."

Writing in The Guardian, Chirac said the establishment of such a group was "necessary to give our forces the means to succeed in their mission in support of the Afghan authorities, and refocus the alliance on military operations."

"The Europeans have relied on their American allies for too long," Chirac wrote in the British daily.

"They have to shoulder their share of the burden by making a national defence effort commensurate with their ambitions for NATO and also for the EU."

He said that NATO should take into account the reality of the European Union's defence capabilities, as most of the EU's member states are also members of NATO.

"We are seeing European defence and NATO complementing each other to the benefit of both. Where Europe is better placed to act for geographical or historical reasons, or because of the nature of the action, the EU is taking on its share of the responsibilities as it should."

Chirac continued: "This development calls for a more substantive political and strategic dialogue between the US and the EU ... It probably also implies closer relations between NATO and the EU."

He said that, in particular, "the possibility of EU members consulting between themselves within the alliance" should be considered.

Meanwhile, the Financial Times reported that Chirac will announce a loosening of caveats on French troops in Afghanistan that prevent them from entering the fierce fighting in the south of the country.

According to an unnamed senior French official, Chirac will say that in future, French troops could be deployed around the country when needed to help their NATO allies, instead of the present situation where they are confined to the area around the capital of Kabul.

In particular, the discussions touched on Chirac's proposal to create a contact group on Afghanistan, gathering the main troop contributors, surrounding countries and top international organizations.

The two leaders also "brought up the situation in the Middle East and notably the Israeli-Palestinian situation and international action toward Lebanon," Bonnafont said.

Gordon Johndroe, the spokesman of the US National Security Council, who arrived in Tallinn before Bush, said: "The leaders agreed on the need for the international community to support the (Fuad) Siniora Government, including with financial assistance. They discussed the upcoming donor conference that France will host on Lebanon."

The US and France have cooperated closely to support Siniora's embattled pro-Western government and bring an end to Syrian interference in Lebanese affairs.

Bush is expected to urge European allies for more support in Afghanistan, during the Tuesday-Wednesday NATO summit in Latvia's capital.

The US president left Washington Monday for an international tour that first takes him to Estonia, Latvia and finally to Jordan, where he meets with Iraqi Prime Minister Nuri al-Maliki.

France and the US clashed over the US-led war in Iraq three years ago, but transatlantic ties have since been on the mend.