Three or four other countries also will be eligible, Defence Secretary Donald H. Rumsfeld said, but he declined to identify them. France, Germany and Russia have been furious that Bush excluded them from postwar contracts because they opposed the U.S.-led invasion that toppled Saddam Hussein.

In Paris, French officials said they were unaware of any policy change on contracts.

Bush announced his change of heart about Canada in his first meeting with the country's new Prime Minister, Paul Martin. "It actually does show that, working together, you can arrive at a reasonable solution," Martin said at a picture-taking session with Bush. U.S. officials said Canada would be eligible to bid on roughly $4.5 billion in reconstruction projects.

Later, White House press secretary Scott McClellan said any country that, like Canada, had been excluded because of opposition to the Iraq war could now qualify if it had made a pledge toward Iraq's reconstruction at a donors' conference in Madrid, Spain, in October.

Bush cited Canada's pledge of $225 million toward Iraq's reconstruction one of the largest at the conference and its expressions of support for the US-led political efforts in Iraq as the reason it won a spot on the contracting list.

McClellan also held out the possibility for other nations, perhaps such as those that have agreed to forgive some of Iraq's massive foreign debt. That category would include France, Germany and Russia, none of which made contributions in Madrid.

It was Bush's second fence-mending session at the Summit of the Americas, a gathering of 34 leaders from throughout the hemisphere. On Monday, Bush and Mexican President Vicente Fox (news - web sites) put aside two years of differences and rallied behind a new US proposal to grant legal status to millions of undocumented workers.