Iraq's Foreign Minister Hoshyar Zebari Friday repeated his country's position that any bilateral military agreements with the United States should preserve his country's sovereignty and national interests.

But speaking before the United Nations Security Council, Zebari showed more optimism than his boss, Prime Minister Nuri al-Maliki, who earlier in the day declared the US-Iraq talks about a long-term US military presence in the country deadlocked.

Zebari was in New York to deliver a routine report to the council, which oversees the UN mandate under which Washington continues to lead the foreign military coalition that is providing security to the war-torn country.

Both Zebari and US Ambassador to the UN Zalmay Khalilzad agreed in their reports that progress has been made in the war against insurgent forces, and in bringing Iraqi security forces up to speed to handle the challenge.

The US-Iraq bilateral agreements, which officials hope to have completed by the end of July, would allow the US to maintain long- term military bases on Iraqi territory after the United Nations mandate expires on December 31.

Al-Maliki said Friday in Jordan that talks with the American side 'have reached a dead end because Iraq has found that American demands extremely violate our country's sovereignty and thus they are unacceptable.'

The sticking points in the agreement have been the legal immunity the US wants for its military and private security forces in the country, and the free hand the US would like to have in fighting Islamist terrorists, Iraqi legislators have said.

Zebari told the council that the two agreements - one would provide the framework for long-term political and economic cooperation, while the second, the status-of-forces agreement, would affect only the military issue - should reflect progress in developing Iraq's security forces.

The two agreements are to be approved by Iraq's Council of Representatives, he noted.

Addressing an increasing number of worries about the agreements in both countries, Zebari called for transparency in the deals and for the respect of Iraq's sovereignty and interests.

Zebari and Khalilzad told the council that violence had dropped to the lowest levels in the last four months as Iraq has increasingly assumed and expanded its security responsibilities.

Khalilzad said there were no confirmed ethno-sectarian deaths in Baghdad last month compared with the more than 1,600 such deaths in December, 2006.

The number of civilian deaths throughout Iraq have dropped by 75 per cent since July 2007 and monthly attacks and car bombings decreased in May this year, falling below the levels of 2006 and 2007. He said suicide bombings increased from October, 2007, to February, 2008, but declined in March and April this year.

The US is leading a 40-nation multinational forces in Iraq, which were authorized by the council to fight insurgency there.

'The struggle for the future of Iraq is vital for it will shape the future of the Middle East,' Khalilzad said. 'We have seen that tremendous progress had been made ... but the people of Iraq still have long way to go.'

He urged Iraq's neighbours to lend support to Baghdad in achieving its goals of ending the conflict, which started after US troops invaded the country in March, 2003.

The multinational force is composed mostly of about 150,000 US military personnel. Its 12-month UN mandate in Iraq is up for renewal by the council in December unless Baghdad decides to terminate that mandate before its expiration.

In Amman, al-Maliki said that his government was especially opposed to Washington's insistence on ensuring the 'immunity of US troops to trial in Iraq' and allowing them to conduct operations without prior coordination with the Iraqi authorities.

Over the past two weeks, US officials have sought to allay Iraqi objections, insisting that Washington is not seeking permanent bases and that the deal would guarantee absolute Iraqi sovereignty.