The US and UK have tabled a draft resolution at the United Nations on the future of Iraq after the handover of power on 30 June.
The issue of security remains the thorniest problem
The proposal endorses sovereignty for an interim Iraqi government and gives approval for a US-led multinational force to remain in Iraq.
Ambassadors for the 15 Security Council members debated the draft resolution in a closed-door meeting.
The diplomatic move comes amid continued violence in Iraq.
Two British nationals were killed in an attack on their vehicle outside the US-led coalition's headquarters in the capital Baghdad. Another Briton was injured in the rocket-propelled grenade attack.
Before the UN meeting in New York, British ambassador Sir Emyr Jones Parry said the draft text was the result of close consultations, and he hoped the resolution would make "early progress", with a vote in early June.
The resolution authorises a multinational force to stay in Iraq after the 30 June handover, with a review after a year, but no deadline for the troops to leave.
The resolution says the transitional Iraqi government could ask for a review sooner than that. But it does not spell out that the troops would definitely leave if asked.
Troops to stay
Sir Emyr said the force would operate "with the consent, in consultation and in partnership" with the Iraqi interim government.
The resolution says the force would be able to take "all necessary measures to contribute to the maintenance of stability and security in Iraq", but does not outline who will be in command.
The Americans say they will control the troops, but other Security Council members believe the Iraqis must have a say.
Detailed negotiations about control of the troops will have to await the appointment of the interim government, due to be named by UN envoy Lakhdar Brahimi before the end of May.
Correspondents say there is expected to be disagreement over the timeframe for the authorisation of the force.
France, which has the power to veto any resolution, has suggested that the multinational force should be authorised only until a new Iraqi government is elected next year.
On the powers of the UN, the British ambassador, Sir Emyr, said the resolution makes clear that the UN "will have a leading role - circumstances permitting, of course, on the ground".
UN duties would involve helping to organise elections - ideally in late December and certainly by 31 January - devising new institutions and helping with constitutional talks.
The resolution also calls for member states to provide soldiers for the multinational force, which would include a special force to protect UN personnel.
Under the proposals, an Iraqi National Security Council would be set up, under Iraqi chairmanship but with a US and British general sitting on it.
Oil revenues would be handed to the interim government, including a fund currently controlled by the US and UK where revenues have been placed. However, the resolution calls for an international board to audit accounts.
Under the resolution, the interim government would also be able to discuss Iraq's debt with international financial institutions.