The world body team is headed by al-Akhdar al-Ibrahimi, chief UN envoy in Afghanistan and now an adviser to UN Secretary General Kofi Annan, according to witnesses on Sunday.
The UN team, which arrived on Saturday, is the highest-level presence for the global body in Iraq since it has withdrawn from the country after two major bomb attacks last year left at least 22 of its staff dead.
Iraq's Shia population is demanding elections before the scheduled 30 June handover of power. But Washington wants to hold regional caucuses which will choose a provisional government that will rule until full elections in 2005.
The Shia's main spiritual leader Grand Ayat Allah Ali al-Sistani is spearheading calls for immediate elections. Al-Sistani refuses to meet US occupation officials, but has indicated he may respect a UN verdict to the polls. Washington is hoping the world body will rule that early elections are impossible and sway al-Sistani.
Annan said his team would keep an open mind.
Iraq's Governing Council, which has been calling for greater UN involvement in the war-torn country, welcomed the team's arrival, but warned their decision would not be binding.
Governing Council member Muhsin Abd al-Hamid said Iraqis would have to resolve the election issue themselves. However, he said the Council was committed to the June handover to avoid delaying the end of the US-led occupation.
Japanese Prime Minister Koizumi
criticised for Iraq deployment
Details of the UN team's agenda are scant and their visit is expected to take place under tight security. The first official visit took place in the heavily guarded Green Zone, the US headquarters where the Council is based.
On the military front, the first Japanese troops entered Iraq on Sunday from Kuwait, Tokyo's most controversial military deployment since World War Two.
There are concerns in Japan about the safety of its troops since occupation forces in Iraq come under daily resistance attacks. Tokyo has also questioned whether the troops violate Japan's pacifist constitution.
The Japanese troops are a much-needed boost for Washington in its efforts to convince the international community to join the occupation of Iraq.
In related news, a roadside bomb exploded near a Polish occupation patrol in the central city of Karbala on Sunday, but there were no injuries, said military officials.
Two people were detained in connection to the blast.