Richard Armitage said the proposal is one of several being considered as the US attempts to increase international participation in Iraq.
The deputy secretary also spoke of the possibility as long as an "American would be the UN commander."
In effect, the proposal means occupation forces would be authorised but not organised by the United Nations as a ‘blue-helmeted peacekeeping operation’, according to UN chief Kofi Annan.
Change in policy
To date, Washington has said repeatedly that it is unwilling to cede command and control of the US-led occupation forces in Iraq - a stance that has drawn opposition from other members of the Security Council.
But five months after the seizing of Baghdad, the US administration now admits there will be a long and costly stay in Iraq.
Paul Bremer, the top US occupation administrator in Iraq, told The Washington Post that tens of billions of dollars would have to be spent rebuilding Iraq's infrastructure.
The United States is also spending an estimated $4 billion a month on the military occupation of Iraq, paying for around 140,000 troops. Currently, there are about 21,000 non-US troops and 11,000 of these are British.
Spanish soldiers help take some of
the financial pressure facing the
Both Britain and the US intend to explore a UN resolution next week to encourage nations to send troops and money for the reconstruction of Iraq, diplomats said on Wednesday.
For its part, the UN is keen to encourage other nations to contribute troops and finance to Iraq’s occupation, but many countries who opposed the Iraq war still demand an end to US domination in the region.
France has advocated a larger UN role of the political process with Foreign Minister Dominique de Villepin calling for a timetable to end the occupation and elections for a constituent assembly to be supervised by the world body.
With a Congress report last Tuesday already predicting a record $480 billion US budget deficit in 2004, the US administration will be looking for support sooner rather than later.
An unnamed State Department official reported by The Washington Post said the White House planned to seek a "huge" supplemental Congress spending bill for Iraq.
Other officials said an emergency injection was also being considered to keep Iraq's interim government from running out of cash.