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British minister pushes Iraq investment amid bombs

*British minister urges investment in Iraq

*Bombings are isolated events, says Iraq

BAGHDAD, April 6 (Reuters) - British Business Secretary Peter Mandelson urged British firms on Monday to invest in Iraq, saying a spate of bombings in the Iraqi capital that killed 34 people did not belie the country’s recent security gains.

Accompanying what he said was the first group of British businessmen to visit Iraq in 20 years, the minister said Iraq had laid out a large welcome mat on its doorstep.

“This delegation marks the fact that Iraq has turned from a place of conflict to a land of opportunity,” Mandelson said after meeting Prime Minister Nuri al-Maliki and other officials.

His delegation included executives from HSBC HSBA.L, Foster Wheeler Energy Ltd FWLT.O, GlaxoSmithKline GSK.L and a dozen others, ranging from construction to transport. Just before Mandelson's news conference, a series of car bombs blew up across Baghdad, underscoring the challenges Iraq faces as U.S. forces prepare to withdraw by the end of 2011.

The bombings were “isolated events”, Iraqi Trade Minister Abdul Falah al-Sudany said.

The sectarian slaughter unleashed by the 2003 U.S.-led invasion has receded and violence has fallen dramatically, but al Qaeda and others continue to carry out frequent bombings.

Mandelson said British businesses should be looking at the long-term potential in Iraq, and should not be swayed by short-term constraints, such as the security situation.

“The trend in security is a strong one,” he said.

Britain was former U.S. President George W. Bush’s main partner in the 2003 invasion, and its last combat troops are due to leave this year. Mandelson’s visit should turn a bilateral relationship based for the past six years on military ties into a normal, primarily commercial one, British diplomats say.

The Iraqi government believes the time has come for foreign investors to make their entry, especially into its massive oil sector.

Iraq sits on the world’s third largest crude reserves, largely underexploited due to decades of war and sanctions.

Germany, France and others have sent delegations to Iraq recently to signal their interest in commercial ties. (Editing by Tim Pearce)

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