The new law, which grants "tolerated" foreigners the legal right to abide in Germany, should go into effect immediately, said Günter Beckstein, Bavaria's state minister of the interior and chairman of this week's interior affairs conference in Nuremberg.

Some ten percent of the nearly 200,000 "tolerated foreigners" in Germany will be able to profit from the new legislation, according to Lower Saxony's Interior Minister Uwe Schünemann.

Most of them come from the war-torn countries of Afghanistan, Iraq and Kosovo. Their applications for asylum have been denied, but the government does not deport them due to humanitarian reasons.

Those who are not yet employed, however, will have until September 30, 2007 to find a position before they are granted the initial two-year residence permit.

The law only applies to singles that have lived in Germany for at least 8 years and families with children for at least 6 years.

More work ahead for Berlin

Seen as a compromise, Friday's decision is the first of two steps in resolving the issue of residence rights for "tolerated foreigners." The states came up with an immediate solution this week, but the coalition in Berlin will take up the matter again unhurriedly.

"We've taken care of the first part. The federal law-makers have to do the rest," said Volker Bouffiers, Hessian's interior minister.

The compromise proposal from Berlin, formulated by Interior Minister Wolfgang Schäuble and Labor Minister Franz Müntefering was informally discussed at the states' interior affairs conference, but "not a millimeter of progress was made," said Günter Beckstein.

The states governed by the conservative Christian Democratic Union and Christian Social Union have rejected the federal proposal, while those under the leadership of the Social Democratic Party have expressed their support for the measure.

Schäuble called the Friday's decision by the states a "positive result," however.

Before the matter goes to Berlin for the second round of discussions, however, Germany's employed "tolerated foreigners" can start applying for their residence permits this week.