* Iraq forces to take security control of Anbar on June 28
* Anbar will be first Sunni Arab province handed back
* U.S. military says handover will be "important milestone"
BAGHDAD, June 23 (Reuters) - The U.S. military will transfer control of security in Iraq's Anbar province to Iraqi forces this week, a remarkable turnaround given the vast western region was considered lost to insurgents less than two years ago.
Anbar will be the 10th of Iraq's 18 provinces returned to Iraqi security control since the U.S.-led invasion in 2003, but it will be the first Sunni Arab region handed back.
Mamun Sami Rasheed, Anbar's governor, said the handover ceremony would take place on Saturday.
"We have been dreaming of this event since 2003," he said.
The commander of U.S. forces in western Iraq, Marine Major-General John Kelly, said the impending handover showed Iraqi forces were increasingly ready to defend Iraq against threats such as those posed by al Qaeda.
"Anbar province is ... an important milestone. It changes the nature of our security relationship here," he told Reuters.
"(It) does not mean al Qaeda is defeated. What it represents is the improving capability of Iraqi security forces to deal with the threat."
Anbar was once the heartland of the Sunni Arab insurgency against U.S. forces and successive Shi'ite-led administrations that took over in Baghdad following the downfall of Saddam Hussein, who was from Iraq's minority Sunni Arab community.
Sunni Arab al Qaeda militants also found Anbar to be fertile ground for operations.
But in late 2006, Sunni Arab tribal leaders sick of al Qaeda's indiscriminate killing of civilians and harsh version of Islam joined with the U.S. military to largely expel the group. Sunni Arab insurgents who sometimes killed dozens of U.S. troops a month turned their guns on al Qaeda instead.
"One of the significant aspects of this turnover is that it occurs in a province that was all but written off," said Kelly.
U.S.-led forces have so far transferred security control for three Kurdish provinces in the north and six Shi'ite provinces in the south, all areas which largely escaped the Sunni Arab insurgency or bitter sectarian fighting in 2006 and 2007.
Anbar was also scene of some of the bloodiest battles in the more than five-year Iraq war, including two all-out assaults by U.S. forces on the city of Falluja in 2004.
That has left some residents resentful of the U.S. military.
Memories are also fresh of events in the town of Haditha in 2005, where U.S. Marines were accused of killing 24 Iraqi civilians. Of eight Marines originally charged, six have won dismissals and a seventh was acquitted at court martial. The accused ringleader still faces court martial.
"Haditha is the best example of their crimes," said Anwar Awad, 42, a teacher in the Anbar capital Ramadi.
Added Abdul Naseir Sabri, 34, a government employee in Ramadi, said: "I hope this will bring real sovereignty to the province and put an end to American interference in our affairs."
On the security front, the Anbar model of Sunni Arab tribes forming "Awakening Councils" to work with U.S. forces has spread to other parts of Iraq and helped sharply cut violence.
"The citizens of this province rejected the terrorists and their intrusive extremist ideology," said Sheikh Raad Sabah al-Mukhelif, a member of the Anbar Awakening Council.
But tensions have simmered between Awakening Council leaders and Iraqi government forces in Anbar. Some council leaders say not enough of their members are being incorporated into the security forces.
There is also anger at the lack of jobs and basic services.
Kelly said U.S. forces would stay at current levels in Anbar for now, but gradually reduce. He did not give details.
"Eventually, we will move into an overwatch posture, away from the population centres," he said.
(For a factbox on Anbar, click on [nL20516493].
Writing by Tim Cocks, Editing by Dean Yates and Dominic Evans
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