The selection of Ghazi Mashal Ajil al-Yawer to the largely ceremonial position broke a deadlock over the makeup of a new Iraqi government set to assume power June 30. Iraqi leaders said the Americans were trying to force them to accept the U.S.-backed candidate.
The Governing Council then decided to dissolve immediately rather than remain in office until the transfer of sovereignty to the new government, said council member Younadam Kana.
A senior Bush administration official said the council dissolved to allow the new government to begin taking over responsibilities immediately. Still, the U.S.-led occupation authority will continue to run Iraq until June 30, the official said on condition of anonymity.
"Today's announcement is a positive step for the future of a free Iraq," national security adviser Condoleezza Rice told reporters at the White House.
"I can tell you firmly and without any contradiction, this is a terrific list and really good government and we're very pleased with the names that emerged," Rice said.
However, Rice warned that "it is possible there could be an increase in violence for a while" as Iraqi militants test the power of the new government.
The prime minister of the incoming government, Iyad Allawi, also announced his 30-member Cabinet. The administration official said the new Cabinet would begin negotiations on the status of U.S.-led international forces in Iraq after June 30 "fairly soon."
In those talks, the Iraqis are seeking greater say over the operations of Iraqi security forces as well as the 135,000 American troops and other coalition forces on Iraqi soil. U.S. officials have said the troops would consult with, but not answer to, the new Iraqi leaders.
President Bush on Tuesday was trying to line up support for a new U.N. resolution to recognize the new government and to establish conditions for its operation until elections are held. Some council members want the interim government to have more authority over foreign troops.
Allawi, presiding over a ceremony in Baghdad presenting the new interim government, said Iraq needs help from U.S. and other multinational forces to help defeat "the enemies of Iraq."
Al-Yawer, a Sunni Muslim who has sharply criticized U.S. policy in Iraq, will hold the largely symbolic post of president, while the more powerful position of prime minister goes to Allawi, a U.S.-backed Shiite Muslim with military and CIA connections.
Allawi, whose appointment was announced Friday, was chosen because he was considered the best candidate to cope with the deteriorating security situation.
"We Iraqis look forward to being granted full sovereignty through a Security Council resolution to enable us to rebuild a free, independent, democratic and federal unified homeland," al-Yawer told a press conference.
As word of the appointment was announced, a, which is located just outside the green zone U.S. coalition headquarters in central Baghdad.
It was not immediately clear if the blast was tied to Tuesday's government announcement.
Council members had angrily accused the American governor of Iraq, L. Paul Bremer, of trying to install Adnan Pachachi, a former foreign minister, as president over their opposition.
Sources had said earlier that the Americans warned that if the members went ahead and voted for al-Yawer, the United States might not recognize the choice.
Al-Yawer, who routinely wears traditional Arab robes and headgear, was sharply critical of the American occupation in a recent television interview, blaming U.S. ineptness for the deterioration in law and order. Al-Yawer also has denounced violence against American and other coalition forces.
U.N. envoy Lakhdar Brahimi, who announced al-Yawer's appointment, had hoped to complete the selection of the 26-member Cabinet by Monday, but the dispute over the presidency delayed the decision for a day.
Most of the 22-member Governing Council backed al-Yawer, the current Governing Council president. A graduate of the Petroleum and Minerals University in Saudi Arabia and of Georgetown University, he is a prominent member of the Shammar tribe, one of the largest in the Gulf region that includes Shiite clans. He enjoys the support of Shiite and Kurdish council members.
Brahimi, flanked by Allawi and al-Yawer, congratulated the two and said, "The people of Iraq will be praying all over the country for the success of their mission, which aims at starting the rebuilding of the new Iraq."
Later, at a welcoming ceremony held in a museum in the green zone that housed gifts once given to former President Saddam Hussein, Brahimi acknowledged that negotiations to establish the new government had been "very precise and difficult."
Coalition spokesman Dan Senor insisted the Americans have not shown a preference for Pachachi, a claim that many council members dismissed as untrue.
If the Americans had insisted on Pachachi, they would have risked a major breach with their Iraqi allies at a sensitive period as Washington prepares to hand control of a still-unstable, war-ravaged country to an untested leadership.
Adnan Pachachi, 81, told reporters he turned down the presidency for "personal reasons" and denied that he was the coalition's choice.
He said the president "must have the support of all levels of the Iraqi people and all quarters."
The officials named Tuesday will rule until elections are held in late 2004 or early 2005 to pick the government that will draft a permanent constitution.