Iraq and the US are pushing close to a deal setting a course for American combat troops to pull out of major Iraqi cities by next June, with a broader withdrawal by 2011.
Subject to final approval by the Iraqi leadership, the exit date for US troops would be December 2011, although the Americans insist on linking that target to additional security and political progress.
US president George Bush has long resisted a timetable for pulling out, but that has softened in recent weeks.
The timing has major political importance in both Iraq and the US.
The presidential candidates, Republican John McCain and Democrat Barack Obama, spar almost daily over the future course of the war.
Mr Obama wants all US combat forces out of Iraq within 16 months of his taking office, saying they are needed more urgently in Afghanistan. Mr McCain says recent security improvements in Iraq show that decisions on the timing of further pullouts should be determined by circumstances on the ground rather than by prearranged timetables.
The administration has inched toward the Iraqi view that setting at least a target date for withdrawal would make it politically palatable for Iraq's government to accept a substantial US troop presence beyond this year.
The rationale for the pullout is that Iraqi security forces will be ready to stand on their own, although it remains possible that some US military training role would continue. In Iraq, provincial elections are supposed to be held later this year, followed by national balloting in 2009.
In one key part of the draft agreement, private US contractors would be subject to Iraqi law, unlike at present, but the American side held firm in its insistence that US troops would remain subject exclusively to US legal jurisdiction, officials said.
Immunity remains the main point of contention between the two sides in finalising the agreement. The Iraqis are reluctant to allow US military contractors to have free rein when outside US bases and without any Iraqi legal authority over them, according to a senior US official who spoke on condition of anonymity to describe delicate negotiations.
There is an additional sense of urgency to complete a deal because the UN Security Council resolution that sets the legal basis for the US troop presence in Iraq is due to expire at the end of this year.
Asked about withdrawal, US secretary of state Condoleezza Rice, said in Baghdad, "We have agreed that some goals, some aspirational timetables for how that might unfold are well worth having in such an agreement." Her use of the term "aspirational" suggested that the timetables would be linked in some undisclosed way to the attainment of measurable progress in the security, political and perhaps economic fields.
Other US officials said the deal includes agreement that by June 30th, 2009, US combat forces would be out of Iraq's cities, set up elsewhere in the country in what the military calls an overwatch role — available to assist Iraqi security forces as needed, while continuing to train and advise Iraqi troops.
At a joint news conference, Ms Rice and Iraqi foreign minister Hoshyar Zebari said the two sides had accepted the draft agreement and would await a review by the prime minister Nouri al-Maliki and other top Iraqi leaders — some of whom oppose some parts of the deal — as well as the Iraqi parliament. The next step is consideration by al-Maliki and his executive council.
AP