US legislators agreed on a legislation that could start bringing troops home from Iraq as early as July 1 and would complete the pullout by March 31, 2008, setting up a veto showdown with President George W Bush.
More than four years after the US-led invasion, the plan presented by negotiators for the house of representatives and senate, both led by Democrats, is a defiant challenge to Bush's Iraq policy.
Both chambers are expected to vote this week on the bill, which includes more than $100 billion in stopgap money for the wars in Iraq and Afghanistan.
But Bush has vowed to veto any timeline for removing US troops from Iraq. By setting a firm date for starting a withdrawal, the measure agreed upon on Monday meets that description.
Senate majority leader Harry Reid earlier accused Bush of living in a "state of denial" and painting a rosy picture of the war.
"He is the only person who fails to face this war's reality - and that failure is devastating not just for Iraq's future, but for ours," Reid said in a speech in Washington.
Democrats say they aim to increase pressure on Bush to bring troops home, shift responsibility to Iraqis and promote a political solution. But they acknowledged that they lack the votes to muster a two-thirds majority in both houses to override a presidential veto.
With Bush and his Republican Party accusing Democrats of undermining the war effort, the center-left party will then face growing pressure to give in and provide the emergency war spending that Bush demands.
"We're going to make sure that the troops have everything they need and there's a change in direction," Reid said.
Bush reiterated his stand earlier on Monday. "I believe artificial timetables of withdrawal would be a mistake," he said.
House and senate negotiators had to meet to resolve differing pullout language in separate bills the two chambers passed in March. The senate set a goal of having US troops home by April 2008, while the house set a firm September 2008 deadline.
The agreed bill would have US troops start to withdraw no later than July 1 if Bush fails to certify to Congress that Iraq is making progress toward peace.
Even if Bush makes the certification, the pullout would have to start by October 1, with the goal of completing redeployment within six months.
Rhetoric between the White House and the Democratic-led Congress has heated up in recent days as the constitutional showdown, in the making since Democrats won congressional elections in November, moved toward a climax.
Bush, at a White House appearance with Iraq multinational force commander general David Petraeus, insisted "there's been some progress" despite last week's devastating Baghdad bombings.
"There's been some horrific bombings, of course, but there's also a decline in sectarian violence," Bush said.
Reid questioned Bush's optimism, saying it contrasts with rising US casualties, slow political reconciliation among Iraqi factions, the refusal of militias to disband and extended tours of duty for US troops in Iraq.
Last week, Reid said the US had already lost the war in Iraq.