Iraq's prime minister has hailed the end of American combat operations, saying it was an important step toward restoring Iraqi sovereignty.

Prime Minster Nouri al-Maliki said his forces were up to the job of protecting the country, and Iraq and the US will now interact as two sovereign nations.

He said in a nationally televised address to mark the occasion: "With the implementation of the troop withdrawal, our relations with the US will enter a new phase.

"This withdrawal represents a basic step in restoring complete sovereignty."

Mr al-Maliki spoke on what the US has deemed its final day of combat operations in Iraq.

Starting tomorrow, the remaining 50,000 American troops will be focused on advising the Iraqi forces, although they will still be able to protect themselves and their bases.

US vice-president Joe Biden was in Iraq today to commemorate the official end of combat operations.

He met top Iraqi officials, including the prime minister, in an attempt to encourage them to form a government after a nearly six-month impasse that followed an inconclusive March 7 election.

The vote failed to produce a clear winner and political leaders have been struggling for months to agree on who should lead the country during a critical time when the remaining US troops will leave the country.

Mr al-Maliki rose to popularity by overseeing a return to relative stability after the bloody insurgency and by cracking down on militias that used to run rampant.