"The consequences of not having a Sofa (Status of Forces Agreement) and of not having a renewed UN authorisation are pretty dramatic in terms of consequences for our actions," Gates said.

A status of forces agreement would replace the current UN mandate - which expires on December 31 - as the legal basis for the US military presence in Iraq.

"Clearly, the clock is ticking," Gates said.

"Clearly there is a need to keep moving just so that we do not run out of time."

Cabinet decision

Iraq's Political Council for National Security reviewed the agreement on Sunday and Monday before sending it on to the cabinet.

Iraq's Al-Sharqiya television reported that ministers from both the largest Sunni bloc - the National Concord Front - and the ruling mainly Shia grouping, the United Iraqi Alliance, wanted amendments.

But Gates and other US officials stressed on Tuesday that the current document should be acceptable to both sides.

According to Gates, there are "only two alternatives: the Sofa or a renewed UN mandate, and going back to the UN at this point there is no assurance that you get a clean rollover".

He said there is "great reluctance" to include further changes, as the US government consults congress on the current draft.

But "if they [Baghdad or congress] were to come up with something we haven't thought of, or identify problems we missed some way, we would have to take that seriously", Gates said.

"So I don't think you slam the door shut. But I would say it's pretty far closed."

For his part, Sean McCormack, the US state department spokesman, said: "We believe that this is a good text. We wouldn't have had the secretary of state and the secretary of defence making phone calls about this text if we didn't think it was a good text."

Mullen's warning

The Bush administration earlier played down the Iraqi cabinet's decision to seek further negotiations.

"We knew it was going to take a little while to get this done," Dana Perino, the White House spokeswoman, said on Tuesday.

"We knew that the Iraqis would have several steps to go through."

But Michael Mullen, chairman of the US joint chiefs of staff, said that time was running out for Baghdad to back the deal, which was originally due to have been completed by the end of July.

He cautioned that when the current UN mandate runs out on December 31, Iraqi security forces "will not be ready to provide for their security".

Iraq violence

Mullen said Iraq risked security losses of "significant consequence" unless it approved an agreement that provides a legal basis for US forces to remain in the country.

While the issue was debated in Washington, violence continued in Iraq.

A car bomb killed four people and wounded three in the northern Iraqi city of Mosul, recently the site of targeted attacks against Iraqi Christians.

The attack, which targeted civilians, occurred in the Ath-Thawra neighbourhood, said Hazim Ahmed, a local policeman.

In Baghdad, police also reported that five people had been wounded when bombs attached to two cars exploded.