Rabat, Morocco/Washington - US Secretary of State Condoleezza Rice saluted the democratic and economic reforms carried out in Morocco under King Mohammed VI.

Rice spoke Sunday in Rabat to reporters after having dinner the night before with Morrocan ministers, including her counterpart, Foreign Minister Fassi Fihri.

Rice and Fihri agreed that the US-Morocco Free Trade Agreement, which went into force in 2005, laid the basis for a new phase of development in Morocco and relations with the United States.

Rice said relations "have always been strong" and were getting better.

"I think it is deeper, and the foundation is stronger now, to take it to a new level, and from that new level, we are also able to work hard on the regional and global challenges that we all face," she said.

Morocco has been included in US President George W Bush's administration's Millennium Challenge Corporation project, which aims to support economic development and accountability around the world.

Rice said that by taking part in the project, Morocco had made wise choices about good governance, political openness, greater reform, empowering women and fighting corruption.

"It is not to say that all the work is done, but I think that everyone has been impressed by the reforms that have been launched under his majesty, King Mohammed VI," she said.

Fihri said the grants given under the project had encouraged "the democratization of the country and also for all the reform that has been launched in a new Morocco."

He said Rice and he had discussed issues taking place in the Maghreb Arab region, Palestinian-Israeli negotiations and efforts to fight common threats, such as international terrorism.

Morocco marked Rice's final stop in a historic trip that took her to Libya, where she and Libyan leader Moamer Gaddafi on Friday formally ended a half-century of hostility.

Rice said Libya's decision to give up its weapons of mass destruction and renounce terrorism allowed "the United States to have a Maghreb policy that does not have a hole in it."

She said the United States supported United Nations' efforts to find agreement over the disputed Western Sahara. (dpa)