TOKYO, Oct 15 (APF) - US President George W. Bush thanked Japan for a multi-billion dollar package that Tokyo is expected to contribute towards rebuilding Iraq, in an interview with a Japanese television network aired Wednesday, while reiterating the need to stop North Korea's nuclear ambitions.

Bush, who will leave Washington later in the day for a whirlwind tour of Asia and Australia, will meet with Japanese Prime Minister Junichiro Koizumi in Japan on Friday.

Koizumi "has assured me that he would work hard to develop a good package and it sounds like he has done so, and I am grateful and thankful," Bush told Fuji Television Network.

The Japanese government is expected to provide a five billion dollar package for four years from 2004 to help rebuild Iraq, Japanese media have said.

"A free Iraq and a peaceful Iraq is a wonderful opportunity for Japan and the United States to work together to achieve because a free and peaceful Iraq will change the world in a positive way," Bush told Fuji Television.

Tokyo has decided to contribute 1.5 billion dollars in grants next year for the reconstruction of Iraq, the Nihon Keizai Shimbun reported Wednesday, adding that an official announcement was expected later in the day.

By making the announcement before Bush's arrival, the Japanese government hopes to underscore that the decision was made independently rather than prompted by US pressure, the newspaper added.

Japan will announce the total amount of assistance at an international conference on Iraq reconstruction to be held in Madrid on October 23-24, the Nihon Keizai said.

Bush told Fuji Television that he will discuss North Korea with Koizumi, adding that the international community should stay focused on stopping the Stalinist state's nuclear ambitions.

The president also expressed his understanding for Japan's wishes to have the kidnapping of Japanese nationals by North Korea raised in multilateral negotiations with Pyongyang, but said resolving the nuclear stand-off must come first.

"I know this is a very sensitive subject. The first thing we have got to do is to focus on the overall objective, that is to make sure the (Korean) peninsula is nuclear-weapons free," he told Fuji Television.

"I have always said that the fact North Korea kidnapped or abducted these people... it talks to the nature of the administration in North Korea. Of course we will send strong signals that we object to that kind of behavior. That's not a civil behavior.

"But the first objective is for all of us to work together for the sake of peace and security particularly in your part of the world to get rid of any nuclear weapon and ambitions for nuclear weapons," Bush said.

Japan and North Korea held a historic summit on September 17 last year, in which Pyongyang made the shock admission that it had kidnapped 13 Japanese citizens during the Cold War era, eight of whom had died.

In separate interviews with other Asian and Australian media, Bush said he stood by his "strong dollar" policy, adding that market forces and the strength of national economies and policies should decide currency values.

"I'm for a strong dollar policy. We've had a strong dollar policy in this administration," the president told a group interview.

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