"As far as we know, Spanish companies are the only ones to have submitted a joint tender as required by the contract," state secretary for defence Fernando Diez Moreno told the El Pais daily.

The call for tenders put out by the United States covers a wide range of equipment including vehicles, communications equipment and uniforms, but excludes heavy artillery, the paper reported.

Spain has reached an agreement with Romania to supply Kalashnikov rifles -- the weapon selected by the United States to equip Iraq's troops -- if it secures the contract, the report said.

Kalashnikov rifles are only manufactured in the countries of the former communist Warsaw Pact, which include Romania.

"Spanish companies have very good prospects in Iraq in the medium term," said Diez Moreno, who accompanied Prime Minister Jose Maria Aznar on a weekend visit to the 1,300-strong Spanish military contingent deployed in Iraq.

Aznar's government was a staunch supporter of the US-led war on Iraq.

WAR.WIRE