The latest draft, sent Thursday to Prime Minister Nouri al-Maliki, also strengthens language regarding Iraqi sovereignty but does not appear to make significant changes in the limited legal authority granted to Iraq to prosecute U.S. soldiers for major crimes committed off-post and off-duty.
But it was unclear whether the changes would be enough to silence critics - especially among the majority Shiite community - who have complained the deal favors U.S. interests over Iraq's.
Prime Minister Nouri al-Maliki plans to show the draft to President Jalal Talabani and the two vice presidents. Later, he will submit it to the Cabinet and, if the ministers agree, he will forward it to parliament for a final decision.
That process could take more than a month.
In an added complication, the Sunni vice president, Tariq al-Hashemi, has called for a national referendum - which would be all but impossible to arrange before the Dec. 31 expiration of the U.N. mandate that allows U.S. troops to operate legally.
Without an agreement or a new U.N. mandate, U.S. military operations would have to stop as of Jan. 1.
The new draft states that U.S. troops must be out of Iraqi cities by June 30 and leave the country entirely by Dec. 31, 2011. The previous draft authorized the Iraqi government to ask U.S. troops to stay beyond that for training and other assistance.
But the current draft states simply that "United States forces shall withdraw from all Iraqi territory no later than Dec. 31, 2011."
The draft also recognizes the right of each country to remove U.S. troops before that deadline.
It also returns control of airspace to the Iraqis but provides that the government may ask the U.S. to provide "temporary support" in surveillance and air control.
The draft also gives Iraq the right to inspect and verify names of all U.S. service members and contractors entering and leaving the country and provides for the U.S. to take "appropriate measures" to deal with any threat to Iraq or its "democratic system and elected institutions."
President-elect Barack Obama pledged during the campaign to bring all combat troops home within 16 months of his inauguration Jan. 20. An Iraqi official said Obama had been briefed on the current draft and raised no objection.
The official spoke on condition of anonymity because the information is sensitive.
The draft agreement - 24 pages in the English version - also states that "Iraqi land, sea and air shall not be used as a launching or transit point for attacks against other countries."
Iraq insisted on the addition after last month's U.S. raid into neighboring Syria and in a bid to ease fears in Iran, which strongly opposes the deal.
As a further assurance, the deal is now officially an agreement "on the withdrawal of United States forces from Iraq" and the "organization of their activities during their temporary presence."
The deal had been envisioned as establishing a long-term security relationship when it was first discussed between al-Maliki and President Bush last year.
By Associated Press Writer Qassim Abdul-Zahra