Japan is making final preparations to provide Iraq with grants worth $1.5 billion in 2004, the first in a series of handouts that could total $5 billion over a four-year period, government sources said Tuesday.

During meetings with senior government officials, Prime Minister Junichiro Koizumi and Chief Cabinet Secretary Yasuo Fukuda stepped up their efforts to finalize the amount before the planned visit Friday by U.S. President George W. Bush.

They also discussed the likely destination of a dispatch of Self-Defense Forces troops to Iraq, the sources said.