International donors have agreed to release $1bn of funds into two trusts to help rebuild Iraq. The move followed a donor conference in Abu Dhabi which looked at how the $33bn pledged last year for reconstruction in Iraq would be spent. But the figure fell short of the $4bn Iraq's interim planning minister had asked donors to release urgently. Priority projects include rebuilding education and health facilities, and restoring water and electricity. On Saturday, Iraq's planning minister Mehdi al-Hafedh put forward a list of 700 projects, with a total cost of $4.2bn, saying the country's needs were "enormous and urgent". But despite the amount committed to the funds falling short of this, the minister said the move was a "strong starting point". "It is clear that the process of funding projects in Iraq has been organised in the right way," he told the AFP news agency. The Abu Dhabi conference brought together delegates from 40 countries, as well as the World Bank, the International Monetary Fund and the United Nations. It was aiming to flesh out the $33bn contributions pledged by donors in Madrid last October. The $1bn committed will be paid into two trust funds run by the United Nations and World Bank. Japan is set to chair a donor committee which will ensure all the money in the funds is distributed in a transparent way, officials said. United States representatives said that it would continue to give aid directly to Iraq, although it would also contribute to the funds. On Saturday, an official from the United States agency in charge of handing out US money and contracts in Iraq said the US will have committed more than half of its pledged $18.6bn reconstruction aid by 1 July. This is the date at which an Iraqi government is due to take over sovereignty from the US-led Coalition Provisional Authority. Admiral David Nash, a director at the Iraq Program Management Office, said about $10bn will have been assigned to projects by this point.