BERLIN (AFP) - Iraqi Prime Minister Nuri al-Maliki expressed confidence Wednesday that German companies would decide "in the coming days" to head back to his country, after meeting more than 100 business leaders here.

"German companies have a right to hesitate ... but we think we can persuade them in the coming days that the security situation allows them to return," Maliki told a press conference on the second day of a visit to Germany.

Reactions by German industrial and trade groups suggested it might take a bit more time, however.

The Iraqi leader said he had invited the roughly 120 business leaders with whom he dined Tuesday to "send representatives to study the situation.

"They said they were prepared to do so," he added.

"We are in control of the situation in the country and are ready to ensure extra protection" to foreign companies, he said.

Germany and Iraq also signed an agreement to promote and protect mutual investment.

The accord signed by German Economy Minister Michael Glos and Iraqi Industry Minister Fawzi al-Hariri, guarantees "effective protection of property, free transit of capital and revenues and access to international arbitrage in the event of diputes," according to a statement issued by the economy ministry.

It demonstrated "both countries' wish to quickly promote investment," the ministry said.

Maliki is visiting Germany and Italy to try to convince investors that pervasive conflict in Iraq has ended and that the country, which sits on substantial oil reserves, has entered a crucial phase of reconstruction.

He was received Tuesday by German Chancellor Angela Merkel, who appeared encouraged by a positive turn of events in Iraq.

"We are pleased that several German firms are already interested in taking part in the reconstruction of Iraq," Merkel told media during a joint press conference after their meeting.

The head of Europe's biggest economic power underscored the complementary nature of Iraq, "rich in raw materials," and Germany, "rich in technological and industrial experience."

"The security situation in Iraq is improving step by step, that is the condition necessary for political and economic reconstruction," Merkel said.

But a spokesman for the German energy company Wintershall, which has been authorised to bid for Iraqi tenders, told AFP on Wednesday it had no concrete project at the moment, in part because of political insecurity.

Wintershall is a subsidiary of the chemical giant BASF that specialises in oil and gas operations.

"We are on the list of around 120 foreign companies qualified to compete for Iraqi tenders but we have no concrete plans for the moment," the spokesman said.

"There are two aspects: first we have to find a project that is interesting from an economic point of view, and then, political stability is a fundamental pre-requisite."

The German foreign ministry has also not yet lifted a travel warning to the still volatile Middle East nation, despite requests from Baghdad.

On Wednesday, the automobile and heavy truck maker Daimler agreed to a protocol with Iraqi officials that did not launch an investment, but would lead to further study, a company spokeswoman said.

Daimler expected to open an office this year in Baghdad.

The industrial group MAN and its partner Terramar plan meanwhile to study the possibility of building an assembly line for buses in Iraq that could be operational in 2009.

"That is a result of the improved security in Iraq," a group statement said.

MAN and Terramar have also signed a protocol on the investment with Iraqi Industry Minister Fawzi al-Hariri.

The German chamber of commerce and industry DIHK has received Iraqi calls for investment with a certain reserve, however.

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