Citing unnamed senior US officials, the newspaper said the decision effectively leaves talks over an extended US military presence Iraq to the next US administration.

In place of the formal status-of-forces agreement negotiators had hoped to complete by July 31, the two governments are now working on a "bridge" document that would allow basic US military operations to continue beyond the expiration of a UN mandate at the end of the year, the report said.

The failure of months of negotiations is being blamed on both the Iraqi refusal to accept US terms and the complexity of the task, the paper noted.

Although Bush has repeatedly rejected calls for a troop withdrawal timeline, "we are talking about dates," acknowledged one US official close to the negotiations, according to The Post.

Iraqi political leaders "are all telling us the same thing.... Iraqis want to know that foreign troops are not going to be here forever," the official was quoted as saying.

Unlike the status-of-forces agreements with South Korea and Japan, where large numbers of US troops have been based for decades, the document now under discussion with Iraq is likely to cover only 2009, the report said.

Negotiators expect it to include a "time horizon," with specific goals for US troop withdrawal from Baghdad and other cities and installations such as the former Saddam Hussein palace that now houses the US Embassy, The Post said.