The United States opened its new embassy building in Baghdad yesterday, a step meant to symbolize its transition from occupying power to an ally of a sovereign Iraqi government.

In recent weeks US diplomats have gradually moved into the $592 million newly-built compound, the world's largest US embassy building, leaving behind a sprawling palace they had inhabited since toppling Iraqi leader Saddam Hussein in 2003.

US officials ruled Iraq directly from the same palace for more than a year after taking Baghdad.