As the transfer of power nears, efforts are stepped up to keep the Iraqi transitional government from losing face, reports Ahmed Mukhtar from Baghdad Next Wednesday, Paul Bremer, the US chief civil administrator in Iraq, will present a written declaration to Iraq's judicial council chief recognising the nation's sovereignty and formally ending the occupation. After a short ceremony -- the details of which have yet to be finalised -- the two countries will resume diplomatic relations. As the formalities of the handover are still under negotiation, efforts are being stepped up in an attempt to ensure that more Iraqis than Americans take over top posts in the state apparatus by 1 July. With less than a week to go, American and Iraqi officials are saying that much of the transfer process has already been carried out. Iraqi officials say that they are running more than half of the government's ministries, making key policy decisions, setting the agenda and managing their own budgets without any direction from the US-led coalition. "Iraqis have 60 per cent of ministries," Dan Senor, the coalition spokesman, said. Iraqis are in full control of 15 of the 26 ministries -- including the key departments of oil, foreign affairs, health, public works and municipalities, education and transportation. Meanwhile, both American advisers and Iraqi leaders said their roles have already shifted with Iraqis running day-to-day affairs and Americans dispensing advice -- and dollars. Coalition sources reported that 150 Americans and people of other nationalities would remain in Iraqi ministries following the handover. Their titles would change from "advisers" to "consultants". According to Walid Saleh, a director at the Ministry of Water Resources, a team of six American experts will be named consultants. "They work for us," Saleh explained. "They are very good technicians and they give us expertise. But we make the decisions," Saleh said. Marc Sievers, a State Department official and senior adviser to the Iraqi Ministry of Foreign Affairs, said Iraqis recently chose diplomats to serve in the nation's 47 embassies. "We were shown the list, we weren't asked," he said. "That's a sovereign decision." Over the next week, the remaining ministries will assume full powers in such critical fields as defence, communications, electricity and finance. "The process is a very complicated one," said Adel Abdul-Mehdi, Iraqi finance minister. "We have tried to take the procedures gradually and I think we will manage to do it." The fact that those advisers-turned- consultants will remain in Iraq raises questions about the exact role they will play in the country's decision-making process. While Iraqi officials insist that the key decisions will be made by Iraqis themselves, scepticism is in order. Iraqi observers say that the US will remain in control because of its hold over the $18.4 billion reconstruction budget and the presence of 140,000 American troops. The US will also have the largest embassy in Baghdad, which is being built on the grounds of the occupation authority's green zone in the centre of the capital. Some say that it will essentially serve as a shadow government. A thorny question surfaced when the US-led occupation launched an air strike on Saturday on Jubail, a poverty- stricken residential neighbourhood in the city of Falluja. Missiles were fired, killing at least 17 Iraqis. The occupation authorities claim that the houses were suspected to be safe haven for Musaab Al-Zarqawi, but Iraqis say that those killed were civilians. In a press conference held on Sunday Iraqi Prime Minister Iyad Allawi said that he had been informed of the raid shortly before it took place. Taking a highly diplomatic position on the issue, although he defended the raid he promised that things would be different from 30 June. Meanwhile, Iraqi officials are struggling to gain legitimacy by distancing themselves from the stance taken by the US-led occupation authorities on some issues, including the fate of the former Iraqi President Saddam Hussein, security issues and the question of who will control key public buildings and resources. "The differences of opinion between the Americans and the officials in the new government have not reached a critical point yet," said one Iraqi observer, who added that most Iraqi politicians are keen on being perceived by their people as independent from America. American officials in Iraq have publicly downplayed any talk of differences with the new government, which the US and the United Nations put together to serve until national elections planned to take place by 31 January 2005 are held. Nevertheless, recent statements by Allawi, Iraqi President Ghazi Al-Yawar and others indicate that the new Iraqi leaders do not intend to behave in such a way as to render themselves pushovers -- even if they are in support of many US policy goals. One such difference of opinion is over the fate of Hussein's former Republican Palace that became the headquarters of US-led occupation authorities. US officials want to stay there, saying there will not be enough room in the American Embassy for all the offices required by the new diplomatic mission. Dan Senor said the Americans wanted the embassy to be within the limits of the green zone, which surrounds the presidential palace premises. But Al-Yawar told reporters the Iraqi government wants the Republican Palace back. "There is no talk of inviting the United States to keep the Republican Palace as an annex to the embassy," he said. "We asked that the Republican Palace be vacated as quickly as possible. It is a symbol of Iraqi sovereignty." There are also differences over the question of Hussein's fate. He has been held in American custody since he was captured by US soldiers in December near his hometown, Tikrit. In a series of interviews, Allawi insisted that the new government expected to take back Hussein once sovereignty was reinstated. Salem Chalabi, who is in charge of setting up a special tribunal to try key members of the ousted regime, said in a TV interview that he expected charges against the deposed Iraqi leader to be filed by 30 June. With most of the crucial political decisions resolved, Iraq's tense security situation remains the greatest concern looming over the 30 June deadline. Senor and other officials said a large terrorist attack was likely. "We're going to be tested," he said. In the last few weeks, American military commanders have been pushing to field as many Iraqi forces as possible. During a recent tour of a military base in Taji, Major General Paul Eaton counted current Iraqi security staff: 92,000 police officers, 74,000 facility guards, 25,000 civil defense soldiers, 17,000 border guards and 7,000 army soldiers. "By this point, we have met or exceeded most of our goals in terms of numbers," Eaton said, though he acknowledged that the quality of the forces was not as high as it should be. After 30 June, it is clear that Iraqi and American forces will continue to work with each other and under American command and that it is only the finer points of the relationship that have not yet been ironed out.