Iraq regains control of cities as U.S. pulls back

By Tim Cocks and Muhanad Mohammed

BAGHDAD (Reuters) - Iraq regained full control of its towns and cities on Tuesday, declaring the day a national holiday for Iraqis to celebrate the withdrawal of U.S. troops, six years after invading to topple Saddam Hussein.

Though some Iraqis fear the first step of a full U.S. withdrawal leaves them open to attack, the government declared "National Sovereignty Day" a holiday and held a military parade to flex its muscles at a still stubborn insurgency.

"This day, which we consider a national celebration, is an achievement made by all Iraqis," Prime Minister Nuri al-Maliki said in a televised address, as citizens drove around the streets in celebration.

"Our incomplete sovereignty and the presence of foreign troops is the most serious legacy we have inherited (from Saddam). Those who think that Iraqis are unable to defend their country are committing a fatal mistake."

In another sign of what he called the start of a new era, the Oil Ministry held an auction for eight oil and gas fields -- Iraq's first major investment by multinationals that were ushered out nearly 40 years ago under nationalization.

But there was a bloody reminder of the war unleashed by the 2003 U.S. invasion as the U.S. military said four U.S. soldiers based in Baghdad had died of combat-related injuries on Monday. It gave no further details.

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