LONDON (Reuters AlertNet) - Syria will for the first time let international non-governmental organisations (INGOs) operate in the country as it struggles to host more than 1 million Iraqi refugees, the United Nations said on Thursday.

Three international aid agencies will sign a memorandum of understanding with the government and join various U.N. agencies and the Syrian Red Crescent in supplying health and education support, the UNHCR refugee agency said.

Eleven more INGOs are negotiating terms with Damascus, the U.N. body added.

"They bring expertise, they bring funding, they have the capacity to employ Iraqis and they are able to work inside refugee communities," Laurens Jolles, UNHCR's Syria representative, told reporters.

The agreement marks the first time international aid groups outside the Red Crescent and U.N. family have been allowed to operate in Syria. No structure exists for local non-governmental groups although some do work on an ad hoc basis alongside religious organisations.

Jolles said the Danish Refugee Council, U.S.-based International Medical Corps and France's Premiere Urgence would be the first international groups to have permanent staff in Syria, as refugee numbers continue to grow despite a decline in violence in Iraq and a tightening of entry restrictions to Syria.

Jolles was in Europe in part to drum up governmental funding for the UNHCR's $261 million 2008 budget for the region.

"The funding we have, the capacity that is there, can't even reach the people we want to reach at this moment," Jolles said. "There is a real need and that need is not being met."

Iraqis in Syria can get health care and education but are not allowed to join the labour market, forcing many to work illegally as personal savings dwindle.

Syria introduced a visa system in October - following requests from the government in Baghdad - that has slowed the inflow, but more than 1,000 people still arrive at the border every day.