Berlusconi said he was responding to public opinion
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Italy is to begin withdrawing its troops from Iraq in September 2005, Italian Prime Minister Silvio Berlusconi has said.
He told Rai state television the pullout would take place "in agreement with our allies".
Italy has 3,000 troops in Iraq - the fourth largest foreign contingent.
Domestic opposition to Italy's involvement in Iraq intensified after the killing of an Italian agent by US troops in Baghdad earlier this month.
The surprise announcement came as Italy's lower house of parliament backed a recent Senate vote to extend the country's military presence in Iraq beyond June.
'Progressive reduction'
Mr Berlusconi has been one of US President George W Bush's staunchest allies in the US-led war in Iraq.
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Main international troops in Iraq
US: 150,000
UK: 8,000
South Korea: 3,600
Italy: 3,085
Poland: 1,700
Ukraine: 1,600
Georgia: 898
Romania: 730
Japan: 550
Denmark: 496
Bulgaria: 450
Australia: 400
Source: Global Security
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But, he said, after speaking to UK Prime Minister Tony Blair he concluded that public opinion in both countries favoured a troop withdrawal.
"In September we will begin a progressive reduction of the number of our soldiers in Iraq.
"I spoke to Tony Blair about it, and public opinion in our countries is expecting this decision," he told Rai.
He said the exact numbers would depend on the Iraqi government's ability to deal with security.
Strained relations
In Washington, White House spokesman Scott McClellan played down the announcement.
"We certainly appreciate the contributions of the Italians. They have served and sacrificed alongside Iraqis and alongside other coalition forces," he said.
There was a huge outpouring of grief at Mr Calipari's death
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He emphasised that Italy's withdrawal "will be based on the ability and capability of Iraqi forces and the Iraqi government to be able to assume more responsibility".
But he rejected suggestions that Italy's decision was due to strained relations after secret service agent Nicola Calipari was shot dead by US troops in Baghdad on 4 March.
"I haven't heard any comment to that effect from Italian officials," he was quoted by AFP news agency as saying.
Mr Berlusconi has said the US must accept responsibility for the shooting, which is being investigated by the US military.
The BBC's Tamsin Smith in Rome says it is the first time Mr Berlusconi has suggested a timetable for withdrawal.
Our correspondent says the Italian government is also mindful of local elections looming early next month.
Also on Tuesday, two other members of the US-led coalition in Iraq - the Netherlands and Ukraine - began a phased withdrawal from the country.
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