The US President, George Bush, has signed an amended Compact of Free Association for the Marshall Islands and the Federated States of Microcnesia.
It provides funding of three point five billion US dollars for a 20 year period.
It also allows the continued used of Kwajalein Atoll as a US military missile tracking station.
The Pacific Islands Report says the Compact Two is designed to gradually wean Marshall Islands and the FSM off US aid, a goal it says is seen as wishful thinking by some observers.
