ALGIERS, Dec 19 (Reuters) - President Francois Hollande refused on Wednesday to apologise for France's colonial past in Algeria, saying instead that Paris wanted to move forward on an equal footing and boost trade with the oil-rich North African nation.
The trauma of the 1954-1962 Algerian war, in which hundreds of thousands were killed before France's departure, left deep scars in both countries which still hold back a partnership France believes could help revive the Mediterranean basin.
Speaking on his first state visit since his election in May, Hollande said the two had agreed a friendship declaration and a five-year strategic pact covering economic, cultural, agricultural and defence ties.
"I want to define with Algeria a strategic partnership on an equal-to-equal basis," he told a news conference after meeting Algerian President Abdelaziz Bouteflika.
"I am not here to repent or apologise, I am here to tell the truth."
While France wants to heal the wounds left by the war, 58-year-old Hollande, who spent eight months working at the French embassy in Algeria in 1978, has limited room for manoeuvre.
A formal apology for its colonial past is a sensitive issue. Many French citizens who lived there before independence and who fought in the French army against Algerian insurgents oppose the idea, as do former loyalist Muslim volunteers known as "harkis".
With its own economy on the brink of recession, France hopes the diplomatic drive will strengthen trade ties. It is also intent on improving security cooperation with Algiers as it pushes for intervention against Islamists who have seized control of northern Mali.
Algeria has 12 billion barrels of oil reserves and is the world's largest French-speaking nation in terms of its surface area. Yet annual trade with France is just 10 billion euros and as Algiers diversifies its economy, China, Spain and Italy have eroded France's market share.
Hollande, who brought with him senior executives from some of France's top firms said Renault had agreed to build a factory to produce some 75,000 cars a year.
"The past should not prevent us from preparing the future," he said. (Reporting By Julien Ponthus and John Irish in Paris; editing by Mark John)