Iraq has succeeded forming a government after months of instability, and the United States welcomed the move by extending a waiver on Iran sanctions to ease pressure on the new leader.
In a phone call with the new Prime Minister Mustafa Kadhemi, U.S. Secretary of State Mike Pompeo congratulated him on taking office and discussed "working together to provide the Iraqi people the prosperity and security they deserve," the State Department said.
The appointment of a new government in Iraq was a complicated affair as the the United States and Iran both have close relations with the country, with Tehran controlling thousands of armed militias and many Shiite groups.
Pompeo said that United States would not enforce sanctions on Iraq buying electricity and natural gas from Iran for 120 days "as a display of our desire to help provide the right conditions for success," a statement said.
Later, Pompeo also congratulated the new prime minister in a tweet, saying, "now comes the urgent, hard work of implementing the reforms demanded by the Iraqi people", a reference to months of protests in many cities demanding government efficiency, accountability and reduction of Iran's influence.
Kadhemi took over Thursday Baghdad time after winning parliamentary approval for his cabinet line-up -- the third attempt to replace Adel Abdel Mahdi, who resigned last year in the face of nationwide demonstrations against corruption.
Iraqi politicians have the delicate task of balancing relations with Washington and neighboring Iran, which has deep economic and religious ties with Iraq but is under sweeping sanctions imposed by President Donald Trump.
Recognizing Iraq's fragility, the Trump administration has given Iraq a series of waivers on U.S. sanctions to let it keep buying gas from Iran.
The latest had been announced last week and was to run for only 30 days.