AFP - Iraqi President Jalal Talabani on Wednesday promised lucrative oil and reconstruction contracts to French business leaders keen to restore their country's place as Iraq's top business partner.

"You need to be brave, you need to be courageous and to invest in all sectors," he said to applause, at a meeting with France's MEDEF employers' association. "Iraq is a very promising basket for investors, without risk."

Talabani has been treated to full honours during a three day state visit to France that began Monday with a formal dinner with President Nicolas Sarkozy and has continued with talks with political and business leaders.

Sarkozy paid a brief visit to Baghdad in February to promote France's ambition to revitalise relations with Iraq's new rulers, which were damaged when Paris led international opposition to the US-led invasion in 2003.

Since Sarkozy took power in 2007 there have been several exchanges of visits between the two capitals as France attempts to return to its Saddam-era status as Iraq's main Western business partner.

Laurence Parisot, president of the influential MEDEF forum of business leaders, told Talabani: "We know that your country wants to diversify its partnerships as much as possible, and we want to take part."

Parisot, addressing the Iraqi leader and some 200 business leaders from both countries, promised MEDEF would lobby for Iraq to join the World Trade Organisation and for an Iraqi partnership deal with the European Union.

Talabani said his visit to Paris "has been a total success, a visit that has shown that doors are totally open to cooperation with France."

He said he wanted to see the French energy giant Total working in his country's oil fields and would look favourably on its bids in an upcoming second round auction for exploration rights in Iraq.

"We might favour a French bid whatever the figures. Don't fear this auction ... The figures aren't everything. We want to see Total work in our oil fields," Talabani said, to more applause from business leaders.

Total's director general for exploration and production, Yves-Louis Darricarrere confirmed that his firm was putting together bids for the Majnun and West Qurna oil fields.

Iraq has the world's third-largest proven oil reserves of 115 billion barrels, behind only Saudi Arabia and Iran.

But there has been little exploration or development of fields in the past three decades because of wars and an embargo imposed on Iraq in 1990 following dictator Saddam Hussein's invasion of Kuwait.

Forty-four companies are due to take part in bidding to develop 10 oil fields in the auction in December.

The warm overtures to France are in stark contrast to Iraqi attitudes in the immediate aftermath of the 2003 invasion, when many -- including Talabani himself -- were critical of French opposition to Saddam Hussein's overthrow.

After the war, US and British firms took the lion's share of reconstruction contracts and France was partly shut out, although firms such as the Lafarge cement giant have already managed to develop major investments.

French companies seeking a bigger stake in Iraq will find security has significantly improved since the civil strife of 2006 and 2007, when insurgent and sectarian attacks killed scores of people daily.

France's ambassador now estimates that only 10 people die each day from bombings and attacks, and the French government shares its private sector's enthusiasm for the market.

This week's Talabani trip marks the first time that an Iraqi leader has been welcomed for a state visit to France. Saddam was never given the honour despite his strong ties with Paris.

Accompanied by his wife Hero Ibrahim Ahmad, the 75-year-old president laid a wreath on the Tomb of the Unknown Soldier at the Arc de Triomphe on Tuesday.