The United States and Iran remain finalizing their strategic agreement to replace the UN mandate for the presence of American troops in Iraq, US National Security Council spokesman Gordon Johndroe said on Wednesday.

"Discussions are ongoing with the Iraqis to finalize a bilateral agreement. We are working to complete the agreement, but it is not final yet," Johndroe said in a brief statement.

Prior to the statement, there were reports saying that US and Iraqi negotiators completed a draft deal on Wednesday to give US troops a legal basis to stay in Iraq after 2008, without setting out a timetable for their withdrawal.

Washington and Baghdad have been conducting negotiations over a long-term American military presence for months. Despite Iraqi demand, the Bush administration has been refusing to give a time- table for the overall military withdrawal of US-led forces from Iraq.

However, leaders of the United States and Iraq have agreed on " a general time horizon," rather then an "arbitrary timetable" for the withdrawal of American forces, the White House said in mid July.

Currently, there are some 144,000 US troops in Iraq.

(Xinhua News Agency August 21, 2008)