A spate of hostile comments from Algerian officials about his refusal to apologise for killings during 132 years of French colonial rule initially stirred fears the business-focussed state visit could become mired in political controversy.

But Algerian President Abdelaziz Bouteflika told Sarkozy in a telephone call on Thursday the statements did not reflect the Algerian position and he remained welcome to visit.

"I consider the incident closed and I will go to Algeria as a friend," Sarkozy told French television.

Sarkozy is expected to sign or make commitments on deals worth about $4 billion during his Monday to Wednesday trip including a Total contract for a petrochemical plant and an Alstom accord for a power station.

"I'm going to bring back contracts to help our factories because the role of the President of the Republic is to get behind French entrepreneurs and help them", Sarkozy said.

French businessmen say their country's sometimes stormy political ties with Algeria have little impact on the daily conduct of extensive commercial ties that have made France the biggest investor outside the oil and gas sector.

"Episodes like this have nothing to do with the business relationship. French companies remain vey welcome here," said Bertrand Huet, a member of a network of French businessmen who advise French firms on overseas possibilities.

Algerian commentators agree, but note that improving ties on the political front remains hostage to the question of the past, a subject dear to the current Algerian leadership, most of whom spent their youth in the revolutionary struggle against France.

Algeria was invaded by France in 1830 and a century later was host to more than one million French settlers.

UNEASY AND VERY COMPLEX

A war begun in 1954 by Algerian fighters cost hundreds of thousands of lives -- Algiers says 1.5 million -- before independence in 1962. Many French also perished.

Sarkozy has defended his refusal to apologise, saying leaders should focus on the future and not "beat their breasts".

The latest row erupted when an Algerian minister said a relationship of equals was not possible with Sarkozy because he refused to apologise for the past and that the French leader had won power in May elections thanks to a "Jewish lobby" - an indirect reference to Sarkozy's Jewish mother.

"One step forward, two steps back - that's the Algerian-French relationship," said Mahmoud Belhimer, an editor and analyst at Algeria's top-selling El Khabar daily. "Ever since independence relations have been uneasy and very complex, and I am not expecting any changes during the Sarkozy era."

Mohammed Lakeb, a teacher at Algiers University, said: "Why is it so painful for France to admit its crimes? If it really wants to establish adult relations with Algeria it has to admit its past."

Algeria had two-way trade with France of more than $8 billion in 2006. In 2005, Algeria provided 16 percent of France's natural gas supplies and 6 percent of its oil supplies.