US-held Marshall Islands become a free republic

In a surprise move ending more than 13 years of negotiations, the Marshall Islands and the United States reached a historic agreement here to allow the Marshall Islands to become a free republic.

The ''compact of free association'' between the two nations calls for about $ 2 billion in US aid to be administered to the new nation over a 15-year period, with an optional 15-year extension. The Marshalls will continue to exist under the US defense umbrella.