A recent surge in violence has left nearly 200 people dead since Sunday, undermined a security crackdown in Baghdad and challenged Prime Minister Nuri al-Maliki's moves to reconcile warring Shia and Sunni factions.

On Thursday, another spate of attacks were reported in Baghdad and in the ethnically-mixed flashpoint city of Baquba, in an area north of the capital which is disputed by rival death squads.

Even as the brutal violence stretched hard-pressed security forces, Iraq prepared to activate a joint military headquarters to command Iraq's navy, air force and ten army divisions, totalling 115,000 troops.

A statement from the Iraqi defence ministry said that military leaders would meet their American and coalition counterparts to announce an agreement "on the control of strategic and combat operations".

US military officials confirmed that Saturday's announcement would represent the creation of a joint headquarters.

Iraq's armed forces are currently coordinated by US headquarters under the command of General George Casey, the head of US-led coalition troops in Iraq, who said Wednesday it would be at least a year until US troops could leave.

On Monday, US military spokesman Major General William Caldwell, said of the agreement: "What this means is that the Iraqi Ministry of Defence is prepared to begin assuming direct operational control over Iraq's armed forces.

"This is a significant step in Iraq's path to self-reliance and security," he said, explaining that the chain of command would pass from Maliki, through his defence minister to the joint headquarters.

US President George W. Bush, meanwhile, on Wednesday said that exiting Iraq at this stage would be a "major defeat."

"If we leave before the job is done, it will shred the credibility of the United States of America," Bush warned at a political fundraiser in Nashville.