Richard Greco, a special adviser to US Defence Secretary, Donald Rumsfeld, insisted that despite security concerns, real progress was being made.
"There will be plenty of investment opportunities in Iraq," he told the Doing Business in Iraq conference in central London.
Greco, who is the US-based director of Private Sector Development for the Coalition Provisional Authority (CPA), Iraq's US-led interim authority, conceded that security and other issues such as transport were still a real problem.
However, he told an audience of at times sceptical-sounding business people, bankers and regional experts that critics should allow time for Iraq to be stabilised.
"It is understandable to have scepticism given all the challenges that we face," Greco said.
"But you have to put it in a historical context. Eighteen weeks, we are talking, and there is extraordinary progress."
Greco, who spent two months in Baghdad from May before taking his current post, insisted that he had seen "near-normal street life" in the city.
He also pointed to specifically business-related reforms such as a recently passed ruling allowing foreign companies to take 100% control of Iraqi businesses, excluding the oil sector.
The prospect of large numbers of foreign investors arriving in Iraq following the removal of Saddam Hussein by US-led forces, has thus been stopped to a great extent by a still extremely precarious security situation.
Baghdad has been plagued by a series of fatal bomb attacks, including one earlier on Tuesday outside the Turkish mission in the Iraqi capital, while US troops are being killed on an almost daily basis.
Such are the risks inherent in doing business, one insurance expert has told the conference earlier in the day, premiums to cover foreign staff in Iraq are currently about 0.5-1%, half of the total insured sum every month.
But Greco, who in a sometimes emotional speech talked of the "love" with which the United States and Britain had gone to war to oust Saddam, urged his audience to take the long-term view.
"It will take patience, trial and error and hard work for the Iraqi people to overcome the challenges that they face," he said.