The deal was presented last week after months of painstaking talks
US Defence Secretary Robert Gates has warned of "dramatic consequences" if Washington and Baghdad do not agree a security deal on US forces in Iraq.
He said if there were no Status of Forces Agreement the US would have to "basically stop doing anything".
Iraq's cabinet is demanding changes to a draft deal already agreed with Washington that would allow US forces to stay in Iraq until 2011.
Mr Gates said the US had "great reluctance" to renegotiate.
"I don't think you slam the door shut, but I would say it's pretty far closed," he said.
"The consequences of not having Status of Forces Agreement (Sofa) and of not having a renewed UN authorisation are pretty dramatic."
Failure to finalise the Sofa or renew a UN mandate would mean US operations would have to be suspended. The UN mandate for US-led coalition forces expires at the end of the year.
We just have to let the Iraqi political process play out
"What really needs to happen is for us to get this Sofa done. It's a good agreement. It's good for us. It's good for them. It really protects Iraqi sovereignty," Mr Gates said.
The Sofa was presented last week after months of painstaking US-Iraq talks.
But on Tuesday Iraqi government spokesman Ali Dabbagh said the cabinet had "agreed that necessary amendments to the pact could make it nationally accepted".
He did not specify what changes would be required.
Mr Gates, speaking to reporters at the Pentagon, said: "We just have to let the Iraqi political process play out."
But he added: "Clearly the clock is ticking."
Mr Gates said a new UN mandate was not necessarily a "clean" option.
"So that's not a solution without peril itself," he said.
A UN Security Council vote would be needed and analysts say there could be a threat of a Russian veto.
The draft agreement calls for a drawdown of US combat forces from Iraq by the end of 2011 and includes US concessions on immunity for US troops who break Iraqi law.
The US and Iraqi governments had previously said the pact was final and could not be amended - only accepted or rejected by the Iraqi parliament.
On the ground with US forces in Tikrit - report contains strong language
But Mr Dabbagh said ministers would meet over the coming days to "give their opinions and consult and provide the amendments suggested" before submitting the amended draft to the US negotiating team.
The cabinet must approve the draft before it can be sent to parliament for a vote.
Apart from the two main Kurdish parties, political leaders have so far withheld their support for the deal.
The draft has also been strongly opposed by the faction led by radical Shia cleric Moqtada Sadr, who brought thousands of supporters on to the streets of Baghdad on Saturday in protest.
Immunity for US military personnel and contractors is thought to be one of the key sticking points, the BBC's Jim Muir reports from Baghdad.
The pact is said to grant Iraqi judicial authorities limited ability to try US troops and contractors for major crimes committed off-duty or off-base - and only then if a joint US-Iraqi committee agrees.
About 144,000 of the 152,000 foreign troops deployed in Iraq are US military personnel.
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