The 235 million U.S. dollar grant will be used to fight poverty in Armenia's agrarian sector, Itar-Tass reports.

Armenian President Robert Kocharyan received the delegation to thank the U.S. government for its financial assistance. He believes that the programme "is very important, because it may help to bridge the gap in living standards between the capital and rural areas."

The Chairman of the Appropriation Subcommittee for Foreign Assistance at the U.S. House of Representatives, Jim Kolbe, said at a news conference that the South Caucasus is the region that has a bright future and may develop successfully if there is peace between its countries.

He said the U.S. would not have started the programme, had it been not confident of Armenia's committment to free and fair parliamentary elections next year and presidential elections in 2008, Kolbe said.

The U.S. will closely watch the implmentation of the programme and reforms in Armenia, Millennium Challenges Executive Director John Danilovich said.