Iraq's security forces won praise for leading offensives against Shiite cleric Moqtada al-Sadr's Mahdi Army militia in Baghdad and the southern city of Basra last spring, but they relied on US air and other support.

Iraq has since been stocking up on new weapons and adding recruits, including some of the more than 100,000 fighters of American-backed "Awakening" front, which helped drive Al-Qaeda out of large parts of the country.

National Security Adviser Muwafaq al-Rubaie, the lead Iraqi negotiator for the pact, recently told AFP that security forces had reached "self-reliance status" in most areas.

But Rubaie said there were "a few areas, like the air force, like the navy, the specialised, high-end counter-terrorism" in which Iraqi security forces were still lagging.

"We need a lot of work on our intelligence agencies. We need some help on the borders, the surveillance of the borders and protection of the borders."

Recent security improvements have nevertheless emboldened Prime Minister Nuri al-Maliki, who has adopted a tougher stance both against insurgents and militias and with Washington -- demanding it provide a clear withdrawal date.

The agreement approved by the cabinet calls for US troops to leave all Iraqi cities by the end of June 2009 and to completely withdraw from Iraq by the end of 2011.

Iraq has won measured praise from its US backers in recent months as it has launched offensives against Shiite militias in Baghdad, Basra and Amara and Sunni-led insurgents in Mosul and Diyala.

"Around eight months ago we gave a report that the national police be disbanded," US Lieutenant General Frank Helmick, who is in charge of the training and transition of Iraqi forces, told AFP in September.

"But then there has been a remarkable turnaround. They are now an aggressive bunch."

The interior ministry, which has a police force of around 560,000, believes it can not only handle internal security, but also thwart Al-Qaeda attacks.

And the defence ministry, which currently has 260,000 service members, plans to develop a well-trained force of 300,000 equipped with modern firepower such as M-16 rifles and F-16 aircraft.

But although Iraqi forces are now in charge of security in 12 of the country's 18 provinces, the US military is on call if an operation goes wrong.

And in the remaining Al-Qaeda bastions of Diyala and Nineveh provinces, where the US military is still in control, Iraqi forces are not as surefooted.

In a bid to beef up its forces Iraq has set aside eight billion dollars for security in its 2009 budget, an amount that constitutes more than 12 percent of total spending next year.

"We need to grow our army vertically and not horizontally. Not size but quality and training, with sophisticated arms and equipment," Rubaie said.

"We are better than anybody else in human intelligence but what we are lacking is signal intelligence," Rubaie said, referring to the kinds of high-tech surveillance now provided by US-led forces.

A key factor in violence falling to four-year lows is the support of Sunni Arab fighters, who once allied with Al-Qaeda but now help the Americans.

These nearly 100,000 men have offered a crucial platform for stability in dangerous Sunni regions, allowing the drawdown of five combat brigades sent last year as part of Bush's "surge" strategy.

Despite the dramatic improvement in security in most parts of the country, militants still launch attacks on a near-daily basis.

But Ali Gedan, the commander of Iraqi ground forces, said in September his troops will be ready by 2011, when US forces are expected to leave.

"The Iraqi army is going through a constructive stage. It is still not ready as we need logistical back-ups, but in our estimate it would be ready by 2011."

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