BAGHDAD (Reuters) -- General Ray Odierno has taken command of U.S.-led forces in Iraq, replacing General David Petraeus.
Odierno took on the new role at a ceremony presided over by U.S. Defense Secretary Robert Gates.
Petraeus will head the U.S. Central Command, the headquarters overseeing operations in the Middle East and beyond, including the war in Afghanistan.
Odierno takes command of U.S.-led forces at a time when U.S. troop levels there are being reduced. While violence has hit four-year lows in Iraq, militants have still been able to pull off large-scale attacks.
A female suicide bomber killed 22 people at a dinner celebration for police in Diyala Governorate on September 15, hours after two car bombs killed 12 people in the capital, Baghdad.
The towering, shaven-headed Odierno served as the U.S. second-in-command in Iraq for 15 months until February.
Odierno and Petraeus came together last year to implement a new counterinsurgency strategy that helped drive violence down, allowing Iraq to begin seeking foreign investment to rebuild after decades of war and UN sanctions.
Petraeus leaves behind a very different Iraq from the one he faced when he took over in February 2007, when Iraq was on the brink of all-out civil war and car bombs rocked Baghdad every day.
Although Iraq is in much better shape, Odierno will face numerous challenges.
On the security front, these include making sure Sunni Islamist Al-Qaeda, already significantly weakened, remains on its knees and unable to incite sectarian bloodshed.
Iraq is expected to hold provincial elections either at the end of 2008 or in early 2009. These will be followed by national polls in late 2009.
Both could be flashpoints for tensions between Arabs and Kurds with territorial disputes in the north and as well as rival Shi'ite factions vying for dominance in the south, home to most of Iraq's vital proven oil reserves.
Iraq's Shi'ite-led government will also soon take control of Sunni Arab tribal units that joined forces with the U.S. military to fight Al-Qaeda.
Some analysts fear the tribal units, which include many former Sunni Arab insurgents, could turn their guns on the government if their demands are not met.
The Pentagon will pull 8,000 troops out of Iraq by February, leaving 138,000 soldiers deployed there. All five extra combat brigades sent to Iraq last year completed their withdrawal in July and have not been replaced.
Despite the drop in overall violence in Iraq, the Bush administration has taken a cautious approach to troop cuts and any decision on a major withdrawal will be left to the next U.S. president, who takes office in January.