The man chosen by the Iraqi Governing Council as prime minister, Iyad Allawi, has begun talks on the formation of an interim government.
Allawi spent years in exile under Saddam Hussein
Members of the council - who nominated the former exile on Friday - say the new line-up could be agreed by Sunday.
UN envoy Lakhdar Brahimi, who has the task of picking the cabinet, has not yet commented on the nomination.
The prime minister is due to take up his post when Iraqi sovereignty is returned on 30 June.
His interim government will lead the country until national elections in 2005.
Mr Brahimi has been in Baghdad for a few weeks trying to put together a team including a prime minister, president, two vice-presidents and cabinet ministers.
But the naming of Mr Allawi - a 58-year-old moderate Shia who spent three decades in exile - by the Iraqi Governing Council came as a surprise.
IRAQ SELF-RULE TIMETABLE
30 June: Handover from Coalition Provisional Authority to interim government
End of Jan 2005: Elections to National Assembly
Autumn 2005: New constitution voted on in referendum
December 2005: Full elections for new government
January 2006: Directly elected government takes office
The US has welcomed the move.
White House spokesman Scott McClellan said Mr Allawi was "a fine and capable leader who appears to have broad support among the Iraqi people".
However the BBC's Jon Leyne at the UN says Mr Allawi was evidently not the first choice of the UN envoy.
In New York, chief UN spokesman Fred Eckhard said: "It's not how we expected it to happen."
But he said Mr Brahimi "respects the decision and is prepared to work with this person on the selection of the other posts in this interim government".
A UK government official in London said the Governing Council had named Mr Allawi prematurely, but the UK considered him a good choice.
Mr Allawi - a British-educated neurologist who left Iraq after turning against Saddam Hussein in the 1970s - was endorsed unanimously by the Governing Council.