Iraqi opposition groups have criticised moves towards a long-term US-Iraqi pact following the expiry of the UN mandate governing foreign troops in Iraq.
The two leaders signed the document during a satellite link-up
On Monday US and Iraqi leaders signed a "declaration of principles" on enduring military, political and economic ties.
Sunni Arab and Shia politicians said it would lead to what they described as "US interference for years to come".
The Iraqi parliament will have to approve any final agreement before it can come into force.
The declaration was signed separately by President George W Bush and Iraqi Prime Minister Nouri Maliki on Monday.
MPs from the Shia bloc loyal to the cleric Moqtada Sadr expressed deep reservations about the agreement.
The declaration of principles sets the framework for negotiations next year on a long-term bilateral relationship, including the presence of US troops and economic ties.
It sets a 31 July 2008 target date to formalise US-Iraq relations, allowing for the expiration of the renewable UN mandate authorising the presence of US-led multinational forces in Iraq.
The Sunni group the Association of Muslim Scholars said the Iraqi signatories of the declaration would be looked on a "collaborators with the occupier".
The bilateral moves came as at least five Iraqi civilians were killed in two separate incidents involving US patrols.
Correspondents say US investors benefiting from preferential treatment could earn huge profits from Iraq's vast oil reserves, causing widespread resentment among Iraqis.