MercoPress. South Atlantic News Agency

Angela Merkel most powerful

German Chancellor Angela Merkel has unseated US Secretary of State Condoleezza Rice as the world's most powerful woman, according to a new ranking by Forbes magazine.

"Despite her short time in office, Merkel has been dazzling world leaders, including Tony Blair and George W. Bush," Forbes said on its website.

"But Merkel has a tough fight ahead of her. Her approval ratings have declined ... making it more difficult for Merkel to win big with key legislative initiatives, including health care reform and corporate tax restructuring," the statement said.

Merkel won a razor-thin victory over Gerhard Schröder in September 2005 snap elections. She became Germany's first female chancellor in November and presides over a "grand coalition" of her conservatives and the centre-left Social Democrats (SPD).

Merkel quickly emerged as the country's most popular politician but recent polls show her foreign minister, Frank-Walter Steinmeier, has displaced her as the country's most respected official.

Forbes said Merkel had improved ties with the United States, which became tense after Schröder opposed the 2003 US-led invasion of Iraq, and that she was the only woman at the table during this year's summit of leaders from the Group of Eight (G8) industrialized nations in St. Petersburg, Russia.

Rice holds the number two spot, followed by China's Vice Premier Wu Yi, PepsiCo Chief Executive Indra Nooyi and Xerox Corp CEO Anne Mulcahy.

Others on the list are Sonia Gandhi (13), president of India's National Congress Party, US talk-show host Oprah Winfrey (14), US Senator Hillary Clinton (18), British Foreign Secretary Margaret Beckett (29) and First Lady Laura Bush (43).