By Sue Pleming

WASHINGTON, April 9 (Reuters) - The United States, which invaded Iraq in 2003, criticized oil-rich Iraq's government on Wednesday for not doing enough to help more than 2 million of its citizens who were now refugees in neighboring states.

The State Department's senior coordinator for Iraqi refugee issues, Ambassador James Foley, told reporters some European nations who were suspicious that U.N. agencies were inflating their needs for Iraqi refugees should also do more to help.

Foley visited several European capitals and Arab nations last month to try to raise more funding for Iraqi refugees and meet an expected shortfall of up to $400 million for them this year. International agencies are asking for about $900 million in total for 2008, he said.

"The government of Iraq has increasing resources, which we believe need to go to meet Iraqi needs and responsibilities. That most certainly includes assistance to citizens who have had to flee the country and are living in neighboring countries," said Foley.

"It would be one thing if the Iraqi government were bereft of resources," he added.

Foley said Arab nations, which were sympathetic to the cause of Iraqi refugees, had made clear to him that Iraq's government must do more and that it was primarily an Iraqi responsibility.

Asked whether the United States had a moral obligation to cover the funding shortfall because of the 2003 invasion and the ensuing ethnic bloodletting that led to the exodus, Foley said Washington had contributed "substantially and well beyond" usual levels of U.S. assistance to the appeal.

So far this year, the United States has given $208 million and planned to give more, ultimately promising to make up about one-third of the international appeal, said Foley.

EUROPEAN SKEPTICISM

More than 2 million Iraqis have fled their homeland since the U.S. invasion in March 2003, going to Syria, Jordan and other countries, where Foley said the situation was deteriorating.

"There is an emerging trend of impoverishment (of Iraqi refugees) in the neighboring countries," said Foley.

He said representatives from European nations, whom he refused to name, told him during meetings in Brussels they were suspicious of the accuracy of some figures provided by the United Nations High Commissioner for Refugees.

"There was an open questioning of the UNHCR's accuracy or reliability in this regard, which I said, frankly, I found surprising. I certainly stated very clearly the strong high confidence that the United States has in the UNHCR's analysis," he said.

"In our view, the trends really are in the direction of increased needs," he added.

Washington has been criticized for its slow pace in accepting Iraqi refugees into the United States. Foley said about 2,700 Iraqis had been settled in the United States since October and a further 5,000 Iraqis were approved for entry.

In addition, more than 8,000 Iraqis were being interviewed between now and the end of June and the U.S. government planned to admit 12,000 Iraqi refugees during the current fiscal year which ends on September 30.

"It will be challenging," he said of the 12,000 target. (Reporting by Sue Pleming; Editing by Cynthia Osterman)

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