(Adds quotes by additional speakers, paragraphs 12-14) By Sue Pleming and Lesley Wroughton WASHINGTON, Feb 13 (Reuters) - The United States pledged to cancel $391 million in outstanding debt owed by Liberia, U.S. Secretary of State Condoleezza Rice said on Tuesday, urging others to help the West African nation recover from conflict. "We will cancel that debt, all of it, under the framework for highly indebted countries," Rice told a donors conference on Liberia held at the World Bank in Washington. "We hope that this will help to relieve Liberia's crippling debt burden, a debt burden that today's leadership do not deserve," she said. The U.S. is Liberia's largest creditor. An on-off conflict from 1989 to 2003 devastated the once prosperous country, wrecking infrastructure and leaving more than 200,000 dead. Its foreign debt is estimated at about $3.7 billion, half of which is accrued interest. Rice also announced that President George W. Bush had asked the U.S. Congress to provide more than $200 million in additional aid for Liberia in the fiscal year starting in October. "The United States is determined to continue and to expand our support in Liberia," said Rice, who attended the inauguration over a year ago of Liberian President Ellen Johnson-Sirleaf, Africa's first woman president. At the same conference, World Bank President Paul Wolfowitz said Liberia's debt was an unacceptable burden for a country of only 3 million people and appealed to donors to cancel the debt. "Much more remains to be done and the clock is ticking," Wolfowitz told representatives from donor countries including Norway, Italy, Saudi Arabia, Japan, Netherlands and Spain. Johnson-Sirleaf has traveled the world seeking commitments by governments to clear Liberia's arrears to the World Bank, International Monetary Fund and African Development Bank. Without an agreement on the arrears, Liberia will be unable to access new lending and qualify for broader debt relief, including under the Heavily Indebted Poor Countries (HIPC) framework. Johnson-Sirleaf said debt relief was critical for her nation, warning that the danger of a return to war was always high in post-conflict countries and a peace dividend was needed. "Please tell your finance ministers to speed up the process," she said, listing her government's political and economic achievements praised by the IMF and World Bank. IMF Managing Director Rodrigo Rato also urged a quick resolution to Liberia's debt and said IMF management had proposed partial use of "special resources" to help clear the $800 million Liberia owes the Fund. Rice praised Johnson-Sirleaf's administration for its work in rooting out corruption and trying to rebuild the country. "We are putting our full support behind Liberia's government," she said. The Liberian president said she was trying to revitalize the country's agriculture industry and reduce poverty in a nation where Wolfowitz said the annual income is just $120 -- about 30 cents a day. "Liberia today is at one of those key moments. We are not out of the woods yet, not by a long shot," Johnson-Sirleaf said.
