France's president has pledged to press ahead with plans to overhaul ties with Nato and launch a Mediterranean Union in 2008, in a New Year's speech to diplomats.

 

Nicolas Sarkozy said on Friday he wanted to bolster European defence arrangements and laid out other foreign policy priorities for the year.

France will take over the rotating European Union presidency during this period.

 

Sarkozy appeared on the international diplomatic stage shortly after his election last May by helping to clinch a deal on reforming the European Union's institutions at an EU summit in June.

He also revisited areas that caused him the most problems last year, such as his invitation to Muammar Gaddafi, the Libyan leader, and a US intelligence report that said Iran had halted a nuclear weapons programme.

 

 

"On Iran and its nuclear programme, you know France's position. Nothing that has happened since has led me to modify my judgment and therefore France's approach," he said.

 

"Our aim is not regime change but, on the contrary, Iran's insertion in its region as a positive actor, provided it respects international law."

 

Sarkozy said he backed "firmness" and sanctions while staying open to dialogue.

 

He again defended Gaddafi's first visit to France in 34 years last month, saying it was a sign to other states that if they too stopped seeking nuclear weapons and supporting "terrorism", they would be welcomed into the international fold.

 

Sarkozy said he would forge ahead with plans for 2008, such as setting up a Mediterranean Union at a Paris summit in July.

 

 

On Nato, he said France intended "to renew its relationship with Nato.

 

"We now have to get to work. France will make pragmatic and ambitious proposals".

 

Sarkozy has previously said that on certain conditions France is ready to rejoin Nato's military command structure from which General Charles de Gaulle abruptly withdrew France in 1966.

 

France would host a donors' conference on Afghanistan with the approval of Hamid Karzai, the Afghan president, he said.