The United States and Britain propose to pull out their armed forces out of Iraq in a phased manner once a permanent government is installed in Baghdad after the elections later this week, a newspaper report said on Tuesday.

The report published in the Times newspaper said that British and US officials considered the elections in Iraq as a "green light" to begin withdrawing some of their forces as early as March.

The United States has more than 1.6 lakh troops in central and northern Iraq, and Britain has around 8,000 in four southern provinces.

Contingency plans were already in place for the small British contingents in the two provinces of Dhiqar and Muthana to go as early as the spring, the report said.

The Pentagon [Images] refused to confirm the report even though a senior British defense official said the plan appeared to match their own plans for a phased withdrawal, calling for the removal of most British troops from Iraq by the end of 2006, the report added.

The Times report went on to say that the Americans planned to pull out 30,000 troops by the New Year and may reduce their presence below 100,000 in the coming months - A move, which appeared contrary to statements by US President George W Bush [Images] and British Defence Secretary John Reid who insisted that coalition forces will not 'cut and run' and stay until the mission in Iraq was complete.