The Wall Street Journal reports that the American military presence in the country will fall by one third to approximately 3,500 troops over the next two or three months.
It is expected that President Donald Trump will promote the move as evidence that he is fulfilling a promise to wind down US involvement overseas in what he calls “endless wars”.
The withdrawal would bring the number of US military personnel in Iraq to the approximate level it was in 2015 near the start of the fight against Islamic State.
Any reduction in forces would be a careful balancing act to prevent a repeat of 2011 when a withdrawal led to a security vacuum allowing the rise of Islamic State across much of the northern part of the country.
Neither the US nor Iraq wants to see a repeat of that, and the Iraqi government is keenly aware of the existence of sleeper sells and small groups of fighters active in the country and in neighbouring Syria.
The Pentagon is pulled between two objectives — reducing its presence in the Middle East, while maintaining a pressure on Iran; and shifting its focus towards building a stronger presence in Asia to counter China.
The president is keen to show progress in bringing American troops home. Those returning from Iraq would add to previous reductions in Afghanistan and at permanent bases in Germany.
A communique issued by the US and Iraq last week indicated that troop cuts were on the horizon when it noted that the mission in Iraq had shifted from combatting Islamic State to training Iraqi forces, which requires fewer personnel.
There are currently 5,200 US troops stationed across the country. January's missile strike on the al-Asad airbase by Iran began a new mission phase focussed on hardening US positions against attacks and withdrawing from a number of Iraqi bases.
NATO and coalition troops from other countries will remain in the country to train Iraqi troops.
US troops have been stationed in Iraq since the 2003 invasion.
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