"This is not an evacuation, just a further downsizing, and the security situation in the country remains under constant review," he added.

Some 600 international staff were stationed in Iraq before the bomb attack on the UN's Baghdad offices last month, which killed 22 people, including the chief UN envoy, Sergio Vieira de Mello.

In the absence of international staff, the UN will rely on more than 4,000 Iraqis to continue mainly humanitarian work.

That will soften the blow for Iraqi civilians who have come to rely even more heavily on the UN in the post war period, the BBC's Greg Barrow reports from the UN.

But UN officials acknowledge there is still likely to be a heavy political impact from this move.

Blow for Bush

The reaction in Washington has been a combination of disappointment and sympathy with the UN's plight, says the BBC's David Bamford.

" ... If the UN is going to spend some time out of the country thinking about whether they can go back, that is time that is lost, that is more dangerous for our soldiers "

Paul Bremer

The decision is a blow to United States' claims that the security situation in Iraq is under control, and is likely to undermine efforts by US President George W Bush to increase the UN role in Iraqi reconstruction.

Paul Bremer, head of the US-led administration in Iraq, said: "The people of Iraq are going to still need electricity; they are still going to need security; they are still going to need water; they are still going to need sewage in the next two to three months.

"They need it now and if the UN is going to spend some time out of the country thinking about whether they can go back, that is time that is lost, that is more dangerous for our soldiers."

KEY UN AIMS IN IRAQ

Deliver humanitarian assistance

Help rebuild institutions to enable Iraqis to govern themselves

Aid safe return of refugees

Promote protection of human rights

Help rebuild justice system

Establish Iraqi media centre

Help Iraq rejoin international community

Other advice to Iraq Interim Authority

The move also comes as many world leaders are at UN headquarters in New York voicing concerns about the way the US-led coalition is running the country.

White House spokesman Scott McClellan said the coalition forces would continue to offer what protection they could.

But this is the nub of the problem, our Washington correspondent says.

Second bombing

So far the US-led forces have been unable to guarantee the full protection of aid agencies going about their work in Iraq.

Aid workers, journalists and other foreigners have been attacked or killed, along with Iraqis trying to get the country up and running.

There is no certainty that things will not get much worse before they improve, our correspondent adds.

The UN had already scaled back its operation in the country after the suicide attack on its headquarters on 19 August, in which 22 people were killed.

Where it had around 650 international staff, the blast saw that figure scaled back to about 100.

Most international organisations working in Iraq have been on high alert since the bombing.

On Monday, a vehicle exploded at a police checkpoint near the UN headquarters in Baghdad, killing the bomber and an Iraqi police officer, and injuring at least 12 others.

The BBC's Greg Barrow says the latest decision was widely expected after a UN committee examining security in Iraq recommended to Mr Annan that all international staff should be pulled out.

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