Egypt's President Anwar Sadat praised China's decision to give Egypt military aid in his May Day speech in Suez City on Saturday (1 May), but Reuters said observers were struck by a conciliatory tone towards the Soviet Union in President Sadat's speech.

Egyptian-Soviet relations have been unsettled recently. The Egyptians have accused the Soviet Union -- their main source of arms -- of withholding military supplies. Moscow has denied this and also the Egyptian claim that Russia intended to strangle Egypt economically.

The Egyptians got the promise of extensive arms aid from China last month soon after they decided to end the friendship treaty with Moscow. Mr. Sadat said Egypt was reluctant to escalate differences with the Kremlin and hoped that one day relations would be normalised.

The President's speech followed a lengthy meeting between Soviet Ambassador Vladimir Polyakov and the Egyptian Foreign Minister Mr. Ismail Fahmy. The ambassador conveyed a two stage Soviet proposal for the resumption of the Geneva Middle East peace conference which observers said won Egyptian approval.

During his speech Mr. Sadat said China's assistance had surpassed all expectations.