Washington  - The United States was cautiously optimistic that an agreement establishing the legal basis for US troops in Iraq will be approved by the Parliament in Baghdad, with the White House saying challenges remain in finalizing the deal.

"We're nearly there, but there are a couple more hurdles that we have to get through," White House spokeswoman Dana Perino said Monday, a day after Prime Minister Nuri al-Maliki's Cabinet approved the agreement.

Iraqi Foreign Minister Hoshiyar Zebari and US Ambassador to Iraq Ryan Crocker on Monday signed the Status of Forces Agreement (SOFA), which must now get approval in Iraq's fractious Parliament before it can take effect.

"We have yet another seven days, a process that they need to go through before we could say that we are final," Perino said.

SOFA outlines the legal basis for 150,000 US troops in Iraq after a United Nations mandate expires December 31. It calls for a withdrawal of all US combat forces by 2011, but allows Baghdad to request an extension of the US presence.

The cabinet approval came after months of complex and contentious negotiations. US troops would have to abandon outposts in Iraqi cities in 2009. The timeframe for withdrawing US forces by 2011 mirrors US president-elect Barack Obama's pledge to pull US combat forces out of Iraq within 16 months of taking office in January.

The chairman of the US Joint Chiefs of Staff, Admiral Michael Mullen, on Monday repeated his belief that any withdrawals must be tied to the security situation on the ground, rather than timetables.

"From the military's perspective, I think it's best to be conditions-based," Mullen said.

He was confident that Iraqi security forces will be ready to takeover security by 2011.

"We want to assist them to get ready as rapidly as possible," Mullen said. "And over the next 36 months, there certainly is a strong possibility that will be the case."

Mullen said that US forces have withdrawn from many US cities, but that Baghdad and the northern city of Mosul still remain difficult challenges.

Iraqi legislators took up the accord on Monday, and the deal could be subjected to rigorous debate, with some members of Parliament advocating that the agreement be put to a national referendum, which could delay the process.

If an agreement is not in place by the end of the year, the US military would have to end operations in Iraq, unless Washington and Baghdad obtain a renewed UN Security Council mandate. Both governments want to avoid another UN resolution.

"I'm not aware of any plan B or anybody putting pen to paper about plan B. So the hope is that this will move forward," State Department spokesman Sean McCormack said.

"This is an important step that happened today. But I have to emphasize there's still steps that need to be taken on the Iraqi side." (dpa)