A Bahraini company that established a network accessible to those without American phones has been forced to scrap its plans after a week. ...

"They applied enough pressure for us to push the button," said Rashid al-Snan, the company's regional operations manager. "I feel really sorry - sorry for the Iraqis and sorry for the foreigners who were using the network. It's a pity we had to stop. We really put in an effort and felt a cheer coming towards us from all over the world."

The US-led authority in Iraq wants to hold a tender for three regional mobile phone licences - almost certain to be one of the most lucrative contracts in post-Saddam Iraq. Mobile phones were not available under the Saddam regime.

But a decision has not yet been taken on whether the mobile network should use GSM technology - used in Europe, the Middle East and many other parts of the world - or the American CDMA technology, which is only used in the US. A decision to use GSM would be a blow to US firms tendering for the contract.