The North Atlantic Treaty Organization (NATO) leaders agreed in principle at a summit in Istanbul last month to provide such training after the handover of powers to Bagdhad from the US-led coalition.

But they left details to be hammered out, and France is notably standing firm in rejecting a NATO mission in Iraq itself, pressing for training to take place outside the war-scarred country, diplomats say.

One NATO official was upbeat after a first meeting of ambassadors Thursday morning.

"They are narrowing down the outstanding issues," he said. "We feel optimistic that it is possible to reach an agreement today, at the latest Friday," he said.

But he declined to go into specifics, and other diplomats were less upbeat as delegations at NATO's Brussels headquarters consulted their governments ahead of new ambassador-level meeting planned for Thursday evening.

Other issues said to be complicating the negotiations included who would command the NATO mission and who would fund it.

Assuming NATO troops go into Iraqi to train forces, they would need protection and discussions centres on whether the US-led coalition would provide that protection.

The United States, which has long pushed for a bigger NATO role in Iraq where American troops have been struggling to contain mounting violence, is pushing hard for an accord.

A NATO military delegation led by US admiral Gregory Johnson was dispatched to Iraq at the start of July to study options for the mission. Diplomats said a second military mission could be sent to Iraq to clarify options.

NATO Secretary General Jaap de Hoop Scheffer said on Monday that he hoped for an agreement by the end of this week on a training mission, both inside and outside Iraq.

Earlier this month Iraq's interim Foreign Minister Hoshyar Zebari, part of the Iraqi administration which took over in June, urged NATO to make good quickly on its promise to train security forces.

Zebari said authorities were "in a race against the clock" in their effort to ensure stability.

Crime has soared in Iraq following the US-led invasion with convicts released by Saddam fueling insecurity while politically-motivated kidnappings of foreign nationals soar.

Another NATO official denied earlier Wednesday that the differences were in any way comparable to the splits which shook NATO to its foundations in the run-up to last year's US-led war against Iraq.

On that occasion France, Germany and Belgium effectively paralyzed the Alliance -- which requires unanimity for all decisions -- by refusing to allow NATO to come to Turkey's aid.

"NATO is very keen to finalize this package... but don't look for repetitions. History does not repeat itself," the official said.

WAR.WIRE