CAIRO [MENL] -- Egypt and the United States have agreed on preliminary arrangements for the leading military exercise in the Middle East.

U.S. officials said Egypt and the United States have worked out the outlines of Bright Star, a multinational exercise meant to take place every two years. They said Bright Star, canceled in 2003, would be significantly reduced because of the U.S. military presence in Iraq.

Officials said the Egyptians understand the U.S. position and have expressed no objection. They said 14 countries would participate in Bright Star, and 38 countries plan to send observers.

The U.S. would not mobilize reservists to participate in the exercise, scheduled for September 2005, officials said. They said the U.S. naval and air contingent allocated to Bright Star would probably be bolstered.