George Bush, the US president, said on Saturday that Iraqi leaders' agreement to form a new coalition government was a historic achievement that "will make America more secure."
Bush called the agreement an "important milestone" in Iraq's journey toward democracy, and said that it represented "compromise and consensus."
After months of mounting violence and political squabbling, Jalal Talabani, the Iraqi president, on Saturday, asked Shia politician Jawad al-Maliki to head the country's first full-term government since US forces invaded in March 2003 and toppled Saddam Hussein.
President Bush said the agreement showed that Iraqis had rejected terrorist efforts to divide them and instead they chose unity.
"As more Iraqi forces stand up, American forces will stand down," Bush said in Sacramento, California.
Condoleezza Rice, the US secretary of state, said it was a good day for Iraq.
"This is a good day for Iraq. It is an important day for Iraq," said Rice in a conference call with reporters on Saturday.
"This is someone with whom we can work and we are looking forward to working with him," added Rice, who personally travelled to Iraq this month to try and break the impasse.
With pressure growing at home for the United States to pull out more than 130,000 US troops in Iraq, the Bush administration was becoming increasingly disheartened at how long it was taking to form a new government.
US troop withdrawal
In her visit to Iraq this month, Rice made clear that US patience was running out and Washington blamed the political vacuum for fuelling sectarian violence that worsened after the February bombing of a Shia shrine.
Rice described Maliki as someone
US could work with
With George Bush's popularity at a low and the prospect of mid-term congressional elections in November, the Bush administration hopes a unity government of Shia, Sunni Arabs and Kurds will lead to more stability and enable troops to start coming home.
Asked about the US troop presence, Rice did not indicate when soldiers could be brought home, but she said the United States would continue to support the training of Iraq's security forces.
"The Iraqi leaders with whom I have spoken ... look very much forward to the day when they can do this on their own as do we, but they recognise they are not quite there yet," said Rice.
Senator John Kerry, the Democrats' unsuccessful candidate for president in 2000, called on the Bush administration to work with the new Iraqi prime minister to hammer out a schedule for pulling US troops out of Iraq by the end of this year.
"As in Vietnam, we have stayed and fought and died - even thought it is time for us to go," Kerry said at a speech in Boston. "Half of the service members listed on the Vietnam Memorial Wall died after America's leaders knew our strategy would not work. It was immoral then and it would be immoral now to engage in the same delusion."
Rice, who said she had not yet met Maliki, praised him as a strong figure capable of getting things done and described him as an Iraqi patriot concerned with Iraq's sovereignty.
Maliki (L) has one month to form a
cabinet and put it to vote
Maliki, an official in Iraq's oldest Islamist party, now has one month to form a cabinet and put it to a vote. He has sought to shake off his hard-line Shia image and present himself as a man capable of uniting Shia, Sunni Arabs and Kurds.
Rice said there was much work ahead to get the rest of the Iraqi cabinet in place and the new government would have to tackle the security situation, particularly in Baghdad.
"It's a long list but obviously the security situation will be key," she said.
Another priority will be to have a Ministry of Interior create a police force the Iraqi people have confidence in. The Interior Ministry has been accused of fomenting the sectarian violence that has peaked in recent months.
Maliki has called for Iraq's militias to be merged with the armed forces, a move Rice declined to comment on until she had more details.
The issue over how armed groups might be incorporated into Iraq's Army was an issue to be discussed later on, she added.