European Union leaders will lock horns over the bloc's first-ever constitution at a two-day summit starting today while seeking to avoid new divisions over Iraq.

The summit, which will also discuss how to kick-start the European economy, will be marked by a political first: German Chancellor Gerhard Schroeder has asked French President Jacques Chirac to represent him on the second day.

"This is unprecedented and underlines how close we are," said a German official, explaining that Schroeder has to return to Berlin for a crucial parliamentary vote tomorrow.

The increasingly desperate state of the Middle East peace process, and a simmering crisis over Iran's nuclear capacity, will also cloud the Brussels talks.

The summit will start with the latest session of the intergovernmental conference (IGC), a rolling series of meetings aimed at finalising a new EU constitution by the end of the year.

The EU's Italian presidency hopes the constitution – setting the framework for the bloc's enlargement from 15 to 25 members next year - will be agreed in time to sign a new Treaty of Rome echoing the EU's 1957 founding text.

"The aim of this summit is to increase pressure for the December deadline to be met," said a senior Italian diplomat on the eve of the summit.

The IGC was launched on October 4 in Rome, and today will be the third session of talks. Earlier this week foreign ministers failed to narrow gaps on plans for a new EU foreign minister and a slimmed-down executive Commission.

Yesterday the leaders will broach equally contentious proposals for a new EU president and changes to voting arrangements, aimed at avoiding decision-making deadlock in the expanded Union.

Small EU countries are concerned that the constitution will further bolster the domination of the larger EU states, while traditional euroskeptics like Britain are determined to resist anything that smacks of an EU "superstate".

Spain and Poland in particular have problems with proposals to cut advantageous voting rights they secured three years ago in the chaotic all-night finale that produced the Nice Treaty.

"It is important for Europe not to become bogged down in an institutional power struggle in the weeks to come," said European Commission head Romano Prodi.

Later today the EU leaders will turn their attention to economic matters - and specifically initiatives designed to kick-start growth after a prolonged slump that has strained the rulebook governing the 12-nation euro zone.

"After a period of uncertainty, some positive signs are emerging," said the Italian presidency.

"The purpose of (the summit) is to focus immediate attention on how to boost growth," it added.

The summit will notably rubber-stamp the appointment of France's Jean-Claude Trichet as new head of the European Central Bank, replacing Dutchman Wim Duisenberg.

This evening the leaders will turn their attention to thorny problems elsewhere in the world: notably Iraq, which remains an open wound since convulsing the Union in the run-up to the war.

British Prime Minister Tony Blair is expected to press his counterparts to do more to help rebuild Iraq, notably at a donors' conference in Madrid on October 23-24.

The meeting will provide an opportunity to discuss a new US resolution on Iraq aimed at encouraging more countries to come to the aid of the increasingly embattled US forces in the country.

Italian Foreign Minister Franco Frattini this week warned against making aid pledges for Iraq dependent on a new UN resolution. "That would really be a catastrophic signal" for Iraq, he said.

For many EU-watchers, though, the most fascinating aspect of this week's summit is the arrangement between Chirac and Schroeder.

Paris and Berlin have long formed the EU's political motor - sometimes roaring, sometimes sputtering - but the Franco-German stand-in accord is a new departure.

"This is a positive thing... It may well be a system that we will see being repeated," said Prodi. – Sapa-AFP.