But, says occupation administrator Paul Bremer, he wants to ensure several conditions are met in screening, training and supervising the unit's participants.
According to a report in the Washington Post, the US-appointed Iraqi Governing Council wants the force to include former employees of Iraq's security services and members of political party militias.
The council also wants the unit to be equipped to gather intelligence and to have broad powers to conduct raids and interrogate suspects.
The Post reports that council leaders feel Iraqi police departments are too weak, and American soldiers lack sufficient local knowledge, to combat guerillas who have been attacking American forces and Iraqis cooperating with the US-led occupation.
Bremer had initially opposed the creation of a paramilitary force under the control of Iraq's interim interior minister, but has softened his position as attacks, particularly on Iraqi targets, have increased.