U.S. military marks end to nearly nine bloody years in Iraq

BAGHDAD (Reuters) - The U.S. military officially ended its war in Iraq on Thursday, rolling up its flag at a low-key ceremony with Defense SecretaryLeon Panetta nearly nine bloody years after the invasion that ousted dictator Saddam Hussein.

"After a lot of blood spilled by Iraqis and Americans, the mission of an Iraq that could govern and secure itself has become real," Panetta said at the ceremony outside Baghdad's still heavily-fortified airport.

Almost 4,500 U.S. soldiers and tens of thousands of Iraqis lost their lives in the war that began with a "Shock and Awe" campaign of missiles pounding Baghdad, but descended into sectarian strife and a surge in U.S. troop numbers.

U.S. soldiers rolled up the flag of American forces in Iraq and slipped it into a camouflage-colored sleeve in a brief, symbolically ending the most unpopular U.S. military venture since the Vietnam War of the 1960s and 70s.

The remaining 4,000 American troops will withdraw by the end of the year, leaving behind a country still tackling a weakened but stubborn Islamist insurgency, sectarian tensions and political uncertainty.

"Iraq will be tested in the days ahead, by terrorism, by those who would seek to divide, by economic and social issues," Panetta told the rows of assembled U.S. soldiers and embassy officials at the ceremony. "Challenges remain, but the United States will be there to stand by the Iraqi people."

Saddam is dead, executed in 2006, while an uneasy politics is at work and the violence has ebbed. But Iraq still struggles with insurgents, a fragile power-sharing government and an oil-reliant economy plagued by power shortages and corruption.

In Falluja, the former heartland of an al Qaeda insurgency and scene of some of the worst fighting in the war, several thousand Iraqis celebrated the withdrawal on Wednesday, some burning U.S. flags and waving pictures of dead relatives.

Iraq's neighbors will watch how Baghdad tackles its problems without the U.S. military, while a crisis in neighboring Syria threatens to upset the region's sectarian and ethnic balance.

U.S. President Barack Obama, who made an election promise to bring troops home, told Iraqi Prime Minister Nuri al-Maliki that Washington will remain a loyal partner after the last troops roll across the Kuwaiti border.