US Secretary of State Condoleezza Rice is in Baghdad to discuss the future of American forces deployed in Iraq.
Ms Rice is holding talks with Iraqi leaders including Prime Minister Nouri Maliki during the unannounced visit.
It comes after 10 months of difficult negotiations between Washington and Baghdad about the status of US troops on Iraqi soil.
Reports suggest a compromise draft agreement is being considered by both governments.
Negotiations have been held up by disagreement over the timing of the final withdrawal of US forces from the country and the immunity of US soldiers from prosecution under Iraqi law, says the BBC's Crispin Thorold in Baghdad.
'No agreement yet'
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