President George W. Bush was joined by Iraqi Prime Minister Nouri al-Maliki via video teleconference on Monday in signing a bilateral declaration that would establish common principles to frame the future relationship between the their countries.

"This moves us closer to normalized, bilateral relations between our two countries," said the Declaration of Principle for Friendship and Cooperation. "With this declaration, leaders of Iraq and the United States commit to begin negotiating the formal arrangements that will govern such a relationship."

"The Declaration is the first step in a three-step process that will normalize U.S.-Iraqi relations in a way which is consistent with Iraq's sovereignty and will help Iraq regain its rightful status in the international community," it added.

Bush's "war czar," Lieutenant General Douglas Lute, told a news conference after the signing ceremony that the non-binding "declaration of principles" laid the groundwork for negotiations in2008 on political, economic and security ties between two countries, including the future presence of U.S. forces in Iraq.

"The shape and size of any long-term, or longer than 2008, U.S. presence in Iraq will be a key matter for negotiation between the two parties, Iraq and the United States," the general said.

He said that the declaration also address economic and politics ties that would help promote political reconciliation among Iraq's Sunni, Shiite and Kurd factions.

Earlier reports cited Iraqi senior officials as saying that Iraq's government is prepared to offer the United States a long-term troop deployment in Iraq and preferential treatment for American investments in exchange for American's guarantee of long-term security.

Lute, confirmed the proposal by saying that it is "a set of principles from which to begin formal negotiations" that the United States hopes can be concluded by July.

However, he noted that the new agreement was not binding.

(Xinhua News Agency November 27, 2007)