"The assessment by the Lebanese government with the support of the UN is that about $500 million will be needed for the forthcoming months," said Sweden's state secretary at the foreign office, Annika Söders.

It used to have one of the most flourishing economies in the Middle East, but Lebanon has now estimated damage inflicted by the offensive at $3.6 billion, with 130,000 homes, 80 bridges and 94 roads destroyed or damaged.

Aid agencies say the bombardment has left both the country's infrastructure and economy in tatters.

According to Oxfam, it coincided with the harvest season and the agricultural sector has therefore been devastated.

"Beyond the piles of bricks and mortar lies the less visible tragedy of acres of ruined farmland and rotting crops," said CEO Jeremy Hobbs on the BBC.

Immoral

UN humanitarian chief Jan Egeland was expected to appeal in Stockholm for more money for mine clearance after accusing Israel Wednesday of conducting a "completely immoral" cluster bomb blitz just before the ceasefire went into effect that has left as many as 100,000 unexploded bomblets in south Lebanon.

"This conference is about temporary, acute reconstruction so people can start to live their lives during the reconstruction," Swedish Aid Minister Carin Jaemtin, who will co-host the conference with Foreign Minister Jan Eliasson, told AFP ahead of the meeting.

Immediate needs

The first donors' conference to be held since the conflict broke out seeks to address the immediate needs for the Lebanese people including "access to medical care, key roads and bridges, markets, and removal of unexploded ordnance," said Kathleen Cravero of the UN Development Program.

Repairing schools and repairing water and electricity supplies systems are also priorities.

External Relations Commissioner Benita Ferrero-Waldner was expected to announce an additional 42 million euros ($54 million), taking the European Union's aid to 100 million.

Around 4 million euros of the new money will go to help the UN clear unexploded munitions, which since the end of the fighting have killed 13 people and injured 46.

International aid

Lebanon has already received emergency aid of $500 million from Saudi Arabia and $800 million from Kuwait.

Ministers from numerous EU countries, as well as representatives of South Korea, Japan, Brazil and Morocco were set to participate in the conference.

Senior officials from the United States and the United Nations, the World Bank, International Monetary Fund, Red Cross and World Health Organization were also expected.

Lebanese Prime Minister Fuad Siniora was also due to attend the conference, where in addition to monetary pledges he was expected to seek donations of mobile homes to temporarily house the tens of thousands who lost their homes.

Annan cements ceasefire

Meanwhile, UN Secretary General Kofi Annan is doing his part on the ground -- on a whirl-wind tour through the Middle East trying to turn the current ceasefire between Israel and Hezbollah into a permanent agreement.

On the fourth leg of his tour, Annan met with Palestinian President Mahmoud Abbas to discuss the Palestinian-Israeli conflict, which many regard as pivotal for peace in the region.

Earlier in the day, Israel’s ongoing air and sea blockade against Lebanon was top of his talks with Israeli Prime Minister Ehud Olmert, during which he called on Hezbollah to release the two Israeli soldiers who were kidnapped on July 12.

Olmert was firm about keeping up the siege until the hostages are released as demanded by UN resolution 1701 signed on August 14 which ended the hostilities.

On Thursday, Annan headed for Jordan to hold talks with King Abdullah II on bolstering the truce between Israel and Hezbollah.