Former Iraqi soldiers have demanded payment
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The US-led administration in Iraq has announced plans for the creation of a new army for the country.
The Coalition Provisional Authority (CPA) also said it would make monthly payments to many of those who lost their jobs when former President Saddam Hussein's military machine was disbanded.
Coalition officials had previously said that all former Iraqi
soldiers would receive just a single month's severance pay.
Former Iraqi soldiers have taken part in sometimes violent protests against the CPA since they were sacked following their defeat by American-led forces in the Iraq war.
On Monday, an explosion hit a fuel pipeline near Iraq's border with Syria in the second such incident in three days.
A similar blast, which took place on Saturday was caused by sabotage.
'Grotesquely over militarised'
The CPA said recruiting for the new Iraqi Army would begin next week but senior officers who were closely allied to the former Baath regime would be barred from applying.
The new recruits' training will be supervised by a US general.
Within three years, it is hoped that 40,000 soldiers will have been trained and be ready to take up duties. The force will be a tenth of the size of its predecessor.
US troops in Iraq come under almost daily attack
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Walter Slocombe, a senior security and defence adviser to the CPA, said Iraq had been "grotesquely over militarised".
He told a news conference: "It is the fact that most people who were in
the old army will not be able to continue military careers.
"The old military needed to be formally disbanded so that it could be replaced by a new military organisation and forces suited to a democratic nation.
"This will be a military force, not a police force, not a
security guard force.
"They will carry out regular military duties. We expect they
will be protecting and defending borders of the country, providing
military defence for key installations and protecting key
facilities."
Severance pay
The CPA said the first payments to former Iraqi soldiers would begin on 14 July.
Between 200,000 and
250,000 former professional soldiers will receive monthly payments roughly similar to those they received when in work.
Conscripts will get a single one-off compensation payment.
Senior members of the now
banned Baath Party will not be eligible for any payment.
The CPA said it would be up to a future Iraqi government whether to continue the
payments.
The move comes amid almost daily attacks on occupying US forces in the country.
Dozens of American soldiers have died in gun and rocket-propelled grenade attacks since the war officially ended.
Oil installations whose output has been earmarked to pay for the reconstruction of Iraq have also come under attack.