Obama promised war-weary US voters he would extricate the United States from the Iraq war. Almost 1 trillion dollars have been spent, and more than 4,400 US soldiers and over 100,000 Iraqi civilians killed since the 2003 invasion.

Obama's Democratic party is battling to retain control of Congress in elections in November. Vice President Joe Biden flew into Baghdad on Monday.

Despite Tuesday's largely symbolic deadline for combat operations to end, the 50,000 US soldiers staying on in Iraq for another 16 months are a formidable and heavily armed force.

Security pact

Iraqi security forces have already been taking the lead since a bilateral security pact came into force in 2009. US soldiers pulled out of Iraqi towns and cities in June last year.

Nevertheless, many Iraqis are apprehensive as US military might is scaled down.

The animosity that led to carnage between majority Shi'ites and minority Sunnis who dominated Iraq under overthrown dictator Saddam Hussein has not healed, and a potentially explosive conflict between Arabs and Kurds has not been resolved.

More than 1.5 million Iraqis are still displaced after being driven from their homes by violence. Many live in squalor.

Iraq's leaders have been unable to form a new government almost six months after an election that many had hoped would chart a path toward stability at a time when deals to develop the country's vast oilfields held the promise of prosperity.

Instead, the ballot could widen ethnic and sectarian rifts if a Sunni-backed cross-sectarian alliance that won the single biggest bloc in the new 325-seat parliament is excluded from power by the major Shi'ite-led political factions.

Suspected Sunni Islamist insurgents linked to al Qaeda have tried to exploit the political vacuum and declining US troop numbers with persistent suicide bombings and assassinations.

The number of civilians killed in July almost doubled from the month before to 396.

The insurgents have targeted domestic security forces in particular, killing 57 at an army recruitment centre on August 17 and more than 60 when suicide car bombers attacked police stations around the country on August 25.