The US could withdraw up to 50,000 of its troops from Iraq by the end of the year, Iraq's president has said.
The city of Najaf has already been handed over to Iraq's security forces
"At least from 40,000 to 50,000 American troops can be [withdrawn] by the end of this year," Jalal Talabani told the Washington Post newspaper.
Mr Talabani said the possible pullout was prompted by the progress made in preparing Iraq's own forces.
Mr Talabani is in Washington for talks with President Bush, in which he said troops reduction would be discussed.
"We think that America has the full right to move some forces from Iraq to their country because I think we can replace them [with] our forces," Mr Talabani said.
The Iraqi president says that those new security forces currently stand at 60,000 and should grow to 100,000 by the end of the year.
However, many observers say that the Iraqi forces are still far from capable of dealing with the ongoing insurgency.
Mr Talabani's statement is the first time either a US or Iraqi political leader has set any timetable for the withdrawal of US troops.
Shortly after the Iraqi president gave the interview, a senior aide called the Washington Post to say that Mr Talabani had not meant to imply a specific timetable.
"He is afraid... this might put the notion of a timetable on this thing. The exact figure of what would be required will undeniably depend on the level of insurgency [and] the level of Iraqi capability," the aide said.
In other developments:
- US and Iraqi forces launch an attack on the insurgent stronghold of Haditha capturing one and killing at least four militants, according to the Associated Press news agency
- Two Iraqi civilians are killed and seven others injured when a minibus explodes in Hilla, 100 km (60 miles) south of Baghdad
- In Baghdad a lorry driver and his assistant are shot dead while trying to deliver concrete walls to fortify polling stations for next month's referendum on the draft constitution
- In a separate incident in Baghdad, five mortar rounds are fired, two of which land in the Green Zone, although they are not reported to have caused any injuries.
The US currently has about 140,000 troops stationed in Iraq.
Despite sliding public support for the US presence in Iraq, Mr Bush has refused to set a schedule for a withdrawal. He has repeated the message that the US must stay the course.
The US has been training home-grown Iraqi troops to take over from their forces to allow a phased withdrawal.
Earlier this month the US officially handed over military control of the southern city of Najaf to Iraqi forces.
The move was the first of a planned series of security transfers across Iraq, paving the way for an eventual withdrawal of foreign forces.