BAGHDAD, June 28: The United States handed sovereignty to an interim Iraqi government two days earlier than expected on Monday, aiming to forestall guerilla attacks with a secretive ceremony formally ending 14 months of occupation.

Outgoing US Governor Paul Bremer handed a letter to Iraqi leaders sealing the formal transfer of powers before immediately flying out of the country. The low-key ceremony was over before it was announced and came as a surprise to ordinary Iraqis.

Its hurried and secret nature appeared to reflect fears guerillas could stage a spectacular attack on the scheduled date of June 30. At a second ceremony in the afternoon - this time broadcast live on Iraqi television - the interim government was sworn in and Prime Minister Iyad Allawi urged all Iraqis to unite against foreign Islamic militants wreaking havoc in the country.

"I call on our people to stand united to expel the foreign terrorists who are killing our children and destroying our country," Allawi said in comments broadcast around the world.

At the earlier ceremony, which formally transferred sovereignty at 10:26am (1126 PST), President Ghazi Yawar hailed "a historic day, a happy day, a day that all Iraqis have been looking forward to".

BUSH SUPPORTS: US President George W. Bush and his closest Iraq war ally, British Prime Minister Tony Blair, exchanged knowing smiles and shook hands at a Nato summit in Istanbul after learning the handover ceremony was over as they sat listening to speeches.

Bush was informed of the handover in a handwritten note passed to him by national security adviser Condoleezza Rice. He scribbled back a note saying "Let freedom reign", according to copies distributed by the White House.

US and British officials say the handover is a key step on the path to democracy in Iraq, but one of the government's first actions is expected to be the imposition of emergency laws, including curfews, to crack down on guerillas.

US and Iraqi officials say militants loyal to Jordanian Abu Musab al-Zarqawi, accused by Washington of links to Al Qaeda, are behind a campaign of suicide bomb attacks in Iraq that have killed hundreds over the past year.

Asked if Allawi would use martial law, Bush said: "He may have to take tough security measures against Zarqawi... He will not cower in the face of brutal murder and neither will we." Blair said emergency laws were "not going to be about taking away people's freedoms - it's going to be about helping those freedoms to happen."

FEAR OF ATTACKS: US officials attending the Nato summit acknowledged that thwarting a surge in attacks believed to be planned for the original Wednesday handover date was a factor in advancing it to Monday. Allawi had requested the change, they said.

"We have said all along that we believed that the terrorists on the ground were going to do everything they can to literally and figuratively blow up the handover of sovereignty," one said. -Reuters

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