French President Nicolas Sarkozy visited Baghdad on Tuesday seeking business opportunities and an improvement in ties damaged by French opposition to the U.S.-led invasion of Iraq.

On the first ever visit by a French president to Iraq, Sarkozy met Iraqi President Jalal Talabani and held talks with Prime Minister Nuri al-Maliki.

Violence has dropped sharply in Iraq in the past year and U.S. troops are preparing to pull out of cities and withdraw completely by the end of 2011. At the end of January Iraq held the most peaceful elections since the fall of Saddam Hussein.

Iraqi officials believe the time has come for foreign companies to invest, especially in oil fields which hold the world's third largest proven crude reserves. French oil major Total SA is among firms qualified to bid for long-term Iraqi oil field servicing contracts.

"The situation is not perfect, but a few months ago who was betting that I was going to visit Iraq and its leaders?" Sarkozy said during a joint news conference with Talabani, speaking through an Arabic interpreter.

"We say to French companies that the time has come to return to Iraq," he added at a later news conference with Maliki, saying French officials would pay another visit to Iraq in the summer with a delegation of businessmen.

Maliki said French firms would not face difficulties because of their country's refusal to join the invasion to oust Saddam.

"They will not be starting from scratch, because French firms have a long history in Iraq," he said.

ONCE CLOSE TIES

France was part of the U.S.-led coalition that fought against Iraq in 1991 after Saddam invaded Kuwait, but favoured steps to ease sanctions against Iraq in the 1990s. When the United States again led an invasion of Iraq in 2003, Sarkozy's predeccessor Jacques Chirac led international opposition.

Tens of thousands of Iraqis and more than 4,000 U.S. soldiers died in fighting that erupted in the aftermath between Iraq's majority Shi'ite Muslims and minority Sunni Arabs.

Sarkozy has sought warmer relations with Washington since his election in 2007 and a visit to Iraq will play better in French public opinion now that the unpopular former U.S. President George W. Bush has left office.

The inauguration in January of President Barack Obama ushered in a new tone in international relations and other European countries that opposed the war, such as Germany, are expected to send high-level delegations to Iraq soon.

Obama pledged during the U.S. election campaign to pull out of Iraq within 16 months, faster than foreseen in a bilateral security pact signed by his predecessor, which calls for the last U.S. soldier to leave by the end of 2011.

U.S. military commanders favour a slower pullout that would not put at risk Iraq's recent security gains.

Sarkozy praised Iraq for voting enthusiastically and for a wide variety of parties in the Jan. 31 provincial polls.

The violence that took Iraq to the brink of all-out civil war has fallen sharply, and the election took place without a single major attack being recorded anywhere.

Yet suicide and car bomb attacks remain common and Sarkozy's visit, part of a Middle Eastern tour, was shrouded in secrecy.

The last high-level visit by a French official occurred in May 2008 when Foreign Minister Bernard Kouchner, who accompanied Sarkozy on Tuesday, spent a few days in the country, in a sign of what Paris said then was a renewed commitment to Iraq.

Kouchner, one of the few French politicians who backed military intervention in Iraq, has previously had to apologise to Maliki after being quoted by Newsweek magazine as having called for him to be replaced.