Two days ahead of schedule, the United States has formally handed over power in Iraq at a low-key ceremony in Baghdad which took place at 10:26 local time (7:26 CET) on Monday morning. U.S. administrator Paul Bremer passed the legal documentation to Iraqi Chief Justice Midhat Al-Mahmodi and with them the running of the war-torn country, 15 months after the invasion to remove Saddam Hussein.

During the ceremony, Bremer told the assembled officials that as "ex-administrator of the Coalition Provisional Authority" he would "leave Iraq confident in the future and confident in the ability of the government to meet the challenges of the future." Coalition officials said Bremer left Iraq less than an hour after the ceremony, saying that he was "going home."

Reactions from the international community on the whole were positive, with Europe's leaders among the first to offer words of support for the new government. However, the overall feeling was one of caution.

Europe sends muted congratulations

The German government displayed little excitement over the surprise move, simply sending its cordial greetings to the new, sovereign government in Baghdad.

Deputy government spokesman Hans-Hermann Langguth reported that immediately after the news broke Monday morning, Chancellor Schröder sent a letter to the Iraqi president, Iyad Allawi, congratulating him on his country’s new sovereignty. However, Langguth added that the handover of power did not mean that Germany would be changing its policy on Iraq.

"The German envoy in Baghdad has handed over a letter to the Iraqi president pledging Germany’s support in rebuilding the country," he said. "The chancellor also made it clear that we are prepared to give humanitarian assistance wherever possible, but that this would not include sending troops to Iraq."

Antje Leendertse, spokeswomen for the German foreign ministry, expressed the hope that Iraq could now find a respected place among the family of independent nations. She added that the government in Baghdad still faced difficult times ahead.

"It’s clear that the next important step must be democratic elections under United Nations guidance at the end of the year," she said. "Germany will wholeheartedly support the world body in its effort to make these elections possible."

Leendertse said Germany’s willingness to contribute to the training of Iraqi police and military forces, but said this was only possible outside the country.

Volker Rühe, defense expert with the conservative opposition, said it was important to scale back the presence of foreign troops in Iraq and strengthen the newly established Iraqi police force. He reiterated his opinion that the disbanding of the old Iraqi army by the U.S.-led Provisional Authority was a major mistake which had contributed to the current security problems in Iraq.

In France, the reception was equally lukewarm. French President Jacques Chirac had "taken note" of the transfer, but the handover was only one step in the political process there, his spokeswoman told AFP on Monday. "The transfer of sovereignty is a long-awaited event, important. It is a step in the political process that will run until 2005," she said. "Other steps must follow and France wishes the interim government and the Iraqi people every success."

British Prime Minister Tony Blair's spokesman told reporters that Downing Street welcomed the earlier-than-expected handover, saying it was an attempt to "seize the initiative" from the insurgents. "We obviously welcome it because it's their decision and it's them taking control," he said. "What's important now is that the Iraqi people can see Iraqi leaders taking charge in Baghdad."

Irish Foreign Minister Brian Cowen, in a statement on behalf of the EU presidency, which Ireland currently holds, said that he wished Iraq's government "every success in their mission to govern Iraq to the stage where free and fair elections can take place."

In Poland, Janusz Zemke, the deputy defense minister, told reporters: "This is very good. Everything that accelerates the process of transfer of power to the Iraqis and speeds up their taking of responsibility is very good."