It is the PM's first public suggestion of a deadline for US withdrawal from Iraq
Iraqi Prime Minister Nouri Maliki has raised the prospect of setting a timetable for the withdrawal of American troops from Iraq.
It comes as the US attempts to push through a new security deal before the end of 2008, when the UN mandate allowing a US presence in Iraq expires.
The Pentagon has played down the suggestion of a withdrawal timetable.
But correspondents say Iraqi MPs would be more likely to back Mr Maliki if the deal includes such a timetable.
The US and Iraqi governments have been negotiating a detailed bilateral Status of Forces Agreement (SOFA) since March and it was supposed to be concluded this month.
Many Iraqis want to see an end to the American military presence in their country, but are fearful of the consequences for security.
In renewed violence on Monday, a female suicide bomber killed nine people and wounded 12 others in an attack on a market in the al-Mafraq area west of Baquba in Diyala province, about 50km (30 miles) north-east of the Iraqi capital, Baghdad.
Respect for sovereignty
A statement from Mr Maliki's office quoted him as telling Arab ambassadors in the UAE: "The direction we are taking is to have a memorandum of understanding either for the departure of the forces or to have a timetable for their withdrawal."
"The negotiations are still continuing with the American side, but in any case the basis for the agreement will be respect for the sovereignty of Iraq."
It was the first time that the prime minister had specifically suggested the setting of a timetable for a US withdrawal.
US Pentagon official Bryan Whitman played down Mr Maliki's suggestion.
"Timelines tend to be artificial in nature," he told reporters.
"In a situation where things are as dynamic as they are in Iraq... it's usually best to look at these things based on conditions on the ground."
The American position has always been that setting a timetable for withdrawal gives an advantage to insurgents who have been battling US-led forces since the 2003 invasion which overthrow Saddam Hussein.
A possible withdrawal from Iraq has become a major issue in the US presidential election campaign and could also figure prominently in local elections in Iraq in October.