All US troops will leave Iraq within three years, and soldiers will withdraw from major towns and cities by next summer, under a landmark deal approved by the Iraqi Cabinet. The last British troops are expected to leave Iraq by the end of next year.

The agreement would draw a line under the campaign launched by President Bush in 2003 to topple Saddam Hussein in which 4,201 US and 176 British military personnel have died.

The pact, which also restricts US operations in the country beyond the end of this year, will be submitted to parliament for a final vote shortly.

Hoshyar Zebari, the Foreign Minister, is confident that the security accord will be ratified before an important religious holiday on November 25. “All bets are on getting approval,” Mr Zebari told The Times.

The draft, which will place US soldiers under the authority of the Iraqi Government, must be signed by the end of this year, when the United Nations mandate authorising the presence of foreign troops expires.

“We think it is a good agreement for Iraq and the United States,” Mr Zebari added, speaking after a Cabinet meeting yesterday where the pact was passed by 27 of the 28 members present. Nine were absent.

It is unclear, however, whether MPs will give the status-of-forces agreement the green light, with some politicians demanding that the text be put to a public referendum.

Members of al-Mahdi Army, the country’s largest Shia militia, which wants the troops out immediately, have threatened renewed attacks against the US military.

Yet the decision is a breakthrough in what has been a drawn-out process. Last month Iraqi ministers sent the text back to the US side, demanding amendments.

The final draft contains two key changes, according to Fawzi Hariri, the Industry and Minerals Minister. First, the deadline for the unconditional withdrawal of 146,000 US troops from Iraq is set for December 31, 2011. Soldiers will pull out of towns and cities to larger bases outside these areas by next summer. The accord will also enable a US-Iraqi team to coordinate an inspection of any US military vehicle, boat or aircraft that Iraq has reason to suspect is being used to move unauthorised weapons or people.

The accord also gives Iraq the right to try US soldiers over serious crimes committed off-duty and off-base. It also prohibits the US from using Iraqi territory to attack neighbouring countries such as Iran and Syria.

The White House welcomed the move as “a positive step”.

The draft accord is sure to generate lively debate in parliament. Abdul-kareem al-Samarrai, of the Sunni Muslim Accordance Front, wants the pact put to a referendum. “It should be the people who decide their fate,” he said.

Some Iraqi politicians say that the election of Barack Obama as US President makes it easier for the pact to be endorsed. He envisages the pullout of all combat troops by mid-2010.

Britain must also sign an accord on the status of its contingent.

In a sign of the challenges awaiting the Iraqi authorities, a suicide car bomb killed 15 people yesterday and injured 20 in a town north of Baghdad.

Main points of the agreement

– All US forces to leave Iraq by the end of 2011
– US forces to pull out of towns by summer 2009
– Iraq can try US troops for serious crimes off-duty and off-base
– Baghdad’s green zone to be handed to the Iraqi Government
– Iraqi airspace will be handed over to Iraq
– US forces need Iraqi judge’s order before they raid houses
– Iraq has the right to search shipments of US military material
– Iraqi territory cannot be used for assaults on neighbouring countries
– Either side may end the accord by serving notice of one year

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