We study the suitability of complex Wilson loop variables as (generali
zed) coordinates on the physical phase space of SU(2) Yang-Mills theor
y. To this end, we construct a natural one-to-one map from the physica
l phase space of the Yang-Mills theory with compact gauge group G to a
subspace of the physical configuration space of the complex G(C)-Yang
-Mills theory. Together with a recent result by Ashtekar and Lewandows
ki this implies that the complex Wilson loop variables form a complete
set of generalized coordinates on the physical phase space of SU(2) Y
ang-Mills theory. They also form a generalized canonical loop algebra.
Implications for both general relativity and gauge theory are discuss
ed.