Kevin Lamarque/Reuters U.S. and French officials have said Clinton and Chirac also will discuss NATO's 50th anniversary celebrations

Clinton and Chirac planned a joint news conference later in the afternoon.

Welcoming Chirac, Clinton said the two leaders have a good working relationship and a warm friendship.

"We have a lot of important things to discuss, especially the situation in Kosovo but also the work we have been doing on international financial matters," Clinton said

The French leader also referred to his friendship with Clinton and their talks on Kosovo, where a midday Saturday deadline has been set for the Serbs to reach an agreement with ethnic Albanians who make up 90 percent of the province's population.

Chirac said, "I hope with all my heart that both sides will understand that it is in their interest to find an agreement because the side which does not understand then would have to bear all the consequences, which would be serious for them and for their country. "

This was a clear reference to Yugoslav leader Milosevic, who has resisted an agreement because it would involve stationing NATO-led peacekeepers in Kosovo.

Before meeting Clinton, Chirac held talks at Blair House with Federal Reserve Chairman Alan Greenspan on reforming the international financial system. Treasury Secretary Robert Rubin and his French counterpart, Dominique Strauss-Kahn, were joining their respective leaders at lunch.

Chirac is seeking to assure Clinton that even though there are disagreements between the two old allies on some issues, such as Iraq, they can reconcile differences in other areas.

On Kosovo, if the Serbs are the cause of any snag, France is prepared to support airstrikes against their military, French officials say.

France and the United States have made commitments to send up to 9,000 troops between them to the Serbian province to police a peace settlement.

U.S. and French officials have said Clinton and Chirac also will discuss NATO's 50th anniversary celebrations in Washington in April. France is concerned that if the meeting turns into a Cold War victory party, it could anger Russia.

Clinton and Chirac also differ on defining a new strategy for NATO operations outside the borders of member nations.

On Iraq, the two leaders agree President Saddam Hussein is responsible for the situation the country finds itself in but Chirac wants to lift the U.N. oil embargo, provided Baghdad agrees to weapons inspections.