US Secretary of State Condoleezza Rice is meeting Middle East representatives having agreed a massive arms deal for allies in the region.

Accompanied by Defence Secretary Robert Gates, they are holding talks with members of the Gulf Co-operation Council as well as ministers from Jordan and Egypt in the Egyptian Red Sea resort of Sharm el-Sheikh.

The pair, who say the huge military aid will help counter al-Qaeda, Hezbollah, Syria and Iran, will later travel to Saudi Arabia to discuss Iraq and other issues with King Abdullah after holding a joint press conference with Mr Gates.

Before leaving Washington, Ms Rice said Egypt will be offered a £6.4 billion package and Israel £14.8 billion over ten years as well as aid to Saudi Arabia and other Gulf states. The Democrat-controlled Congress still has to approve the funding.

During a refuelling stop at Shannon Airport in Ireland, she dismissed suggestions that the tens of billions of dollars is a quid pro quo, saying: "We are working with these states to fight back extremism.

"We all have the same interest in a stable Iraq that can defend itself, defend its new political system and be unified. This effort will help bolster forces of moderation and support a broader strategy to counter the negative influences of al-Qaeda, Hezbollah, Syria and Iran."

Iran, which has criticised the military aid, has accused the US of trying to create fear and mistrust in the Middle East and of aiming to destabilise the region.

Ms Rice continued: "If there is a destabilisation of the region it can be laid at the feet of an Iranian regime. This is a positive agenda in the Middle East, not one that is a negative agenda or against someone."

The Bush administration is said to be increasingly frustrated at Sunni-dominated Saudi Arabia's attitude towards the Shia-led Iraqi government although Ms Rice sought to play down that criticism ahead of talks in Jeddah.

Before returning to Washington on Thursday, Ms Rice will also meet Israeli and Palestinian leaders.