Host Japan said the meeting of the eight major industrial powers would come up with some 150 projects to develop the troubled border region, where violence by Taliban and Al-Qaeda militants has caused growing international alarm.

"The G8 has decided to provide support for the tribal people living in the border region between Afghanistan and Pakistan," Foreign Minister Masahiko Komura said after talks in the ancient Japanese capital Kyoto.

A joint statement by the G8 -- Britain, Canada, France, Germany, Italy, Japan, Russia and the United States -- called for action to fight drug production and improve governance in Afghanistan.

It was not immediately clear whether the four billion dollars for the 150 projects came from new funds or the 20 billion dollars pledged earlier this month at a donors conference for Afghanistan in Paris.

Violence has soared in the porous border region despite the presence of some 70,000 multinational troops in Afghanistan.

While Japan hoped to focus the day's talks on Afghanistan, neighbouring North Korea cast a shadow.

The hardline communist state handed over a long-awaited declaration of its nuclear programmes under a six-nation disarmament deal.

The United States said it would begin the process of removing North Korea from its list of state sponsors of terrorism.

The timing is awkward for Japan, which had pressed Washington, its closest ally, to leave the North on the blacklist due to Pyongyang's abductions of Japanese civilians.

"Submitting the declaration is good, but the problem is in the contents," Komura told reporters.

"I would presume that the United States would have the courage to go back on its decision if it's not up to standard," he said of the declaration.

In Washington, President George W. Bush said the United States "takes the abduction issue very seriously."

"We expect the North Koreans to solve this issue in a positive way for the Japanese," Bush said, in remarks echoed by Secretary of State Condoleezza Rice in Kyoto.

North Korea in 2002 admitted kidnapping Japanese civilians in the 1970s and 1980s to train its spies in Japanese language and culture.

It freed five abductees and their families and said the case was closed. But in an about-turn, it agreed earlier this month to reopen an investigation.

The compromise was widely linked to North Korea's desire to be taken off the terror blacklist, which would pave the way for it to receive US aid and international loans.

But families of the abductees have voiced outrage, saying the US action was a serious blow to their efforts to pressure North Korea.

Japanese officials said other topics for discussion included Iran's nuclear drive, rising food and oil prices, and the political crisis in Zimbabwe.

Iran has defied UN Security Council resolutions urging it to suspend uranium enrichment, which the West fears could be used to make a nuclear weapon. The Islamic republic says the nuclear work is for peaceful purposes.

Zimbabwe heads to the polls on Friday even after the opposition pulled out following a wave of violence.

Rice urged President Robert Mugabe's party to enter talks with the opposition, warning that the upcoming election would not yield a "legitimate" government.

The meeting here is meant to prepare for the July 7-9 summit of G8 leaders in the northern Japanese mountain resort of Toyako.

Hundreds of protesters rallied in Kyoto against the tightly guarded ministers, denouncing globalisation and US-led military operations in Afghanistan and Iraq.

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