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PARIS (Reuters) - France offered Beirut a 500 million euro loan on Wednesday ahead of a donors' conference, amid fears that political unrest in Lebanon could undermine efforts to rebuild the country's shattered economy.
France organised Thursday's meeting to drum up the billions needed to help Lebanon recover from last year's war between Israel and Shi'ite Hezbollah guerrillas and rescue its debt-riddled finances.
The offer came after Chirac on Tuesday said Lebanon had practically run out of money and that anti-government protests in Beirut could discourage donors.
"Taking to the street can only aggravate the situation and increase tensions," Lebanese Prime Minister Fouad Siniora said in Paris after a lunch with Chirac.
Siniora said he hoped for strong support from Arab countries and the international community on Thursday, adding: "The cost of helping Lebanon, however expensive that might seem, is much less than the cost of not helping Lebanon."
His comments came a day after demonstrations against his Western-backed government shut down much of Lebanon and sparked its worst unrest since the 1975-1990 civil war.
Three people were killed and 176 wounded.
Hezbollah and its allies, including Christian leader Michel Aoun, want veto power in government and early parliamentary elections to remove what they call a U.S. cabinet in Lebanon.
French officials say around 50 countries and organisations will take part in Thursday's donors' meeting but decline to say how much money they expect to be pledged.
The European Commission said on Wednesday it was pledging almost 400 million euros ($520 million) of additional aid to Lebanon. That would bring to 500 million euros the total provided to Lebanon by the EU executive since last June.
The Lebanese government is hoping for up to $5 billion in assistance and Siniora said the proceeds of the conference would be used to cut or service Lebanon's public debt which, at $40.5 billion is equal to 180 percent of gross domestic product.
U.S. Assistant Secretary of State for Near Eastern Affairs David Welch told reporters in Paris that Washington would be very supportive but said aid would be tied to reforms.
"American assistance to Lebanon ... over the last five or six years has averaged between $30 and 40 million a year. You can expect an American pledge tomorrow that will be many multiples of that number," he said.
(Additional reporting by Crispian Balmer, Francois Murphy)
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