Washington and Baghdad said on Thursday they were very close to signing a crucial military deal that would decide the future of American forces in Iraq after the UN mandate expires in December.
In a surprise one-day visit to Iraq on Thursday, US Secretary of State Condoleezza Rice said the two countries were "very, very close" to finalising the agreement but had not yet clinched the deal.
Iraqi Foreign Minister Hoshyar Zebari, however, went a step farther and said the text of the deal was ready and the draft would be presented on Friday to the Political Council for National Security, a strategic body of Iraqi leaders.
"We are very close, we have a text, but not the final agreement. Everything has been addressed," Zebari told reporters after meeting Rice. He added that the text would be handed over on Friday.
US President George W. Bush and Iraqi Prime Minister Nuri al-Maliki agreed in principle last November to sign a Status of Forces Agreement (SOFA) in Iraq by the end of July, but controversy has delayed it.
The proposed pact will decide the future presence of American forces in Iraq after the expiry of the UN mandate, which currently acts as the legal basis for their presence in the country.
The deal has drawn sharp criticism from Iraq's political factions, especially from the anti-American group of Shiite cleric Moqtada al-Sadr which on Thursday protested against Rice's visit.
But Rice told reporters in a joint news conference with Zebari that Washington had been very "flexible" in the negotiations.
"The US has gone very far in this agreement, it is a very advanced agreement," she said before departing for Washington.
Zebari said the negotiators were "redoubling efforts to bring it (a deal) to a final conclusion."
"It has taken us a very long time, but we are very, very close to close this agreement," he said, adding that the accord was the most advanced pact Washington had signed with any country.
He said the draft will be considered on Friday by Iraq's Political Council for National Security, which includes the president, prime minister and leaders of all political parties.
Earlier on Thursday, Rice said the deal had not yet been signed and there were "still issues concerning exactly how our forces will operate. I think that is only natural at this point."
During the Rice-Maliki meeting, discussions included "points of agreement and difference," as well as latest developments in talks between Iraqi and American negotiators on the pact, a statement from the premier's office said.
Asked earlier if the delicate question of immunity was the main sticking point, Rice declined to provide details but said progress was being made.
"We are continuing to work to make sure that any timeline, aspirational timelines, that are in the agreement really do reflect what we believe and... what is reasonable," she said, adding that she would also discuss a stalled provincial election law that Washington believes is key to national stability.
The White House has so far refused to be locked into a fixed date for withdrawing US combat troops, but has suggested a series of target dates for giving Iraqis control over security in different parts of the war-torn country.
Iraqi politicians have bristled at the idea of a continuing defence pact with Washington. The original target date agreed by Bush and Maliki for an agreement was July 31.
Any deal would first have to be ratified by the Iraqi parliament and the veto-wielding presidency council.
Zabari insisted that the agreement would be in the interests of both Iraq and its neighbours. Washington's arch-enemy Iran has repeatedly called for a complete withdrawal of US troops.
With 142,500 American troops still in Iraq, the issue is politically sensitive in Washington as the November US presidential election draws nearer.
Sadr supporters also denounced Rice's visit.
"This visit is a bad omen for Iraq. It represents American dictatorship that rejects Iraq's sovereignty," said a banner carried by Sadr followers in the central holy city of Najaf.