WASHINGTON: President Barack Obama and Iraqi Prime Minister Nuri al-Maliki hailed the seeds of a growing cooperation between their nations, pledging that out of the fires of war a new friendship would emerge.

But they warned the path ahead would yet prove tough, with many obstacles to overcome and sectarian violence still threatening Iraq's stability.

"Both of us agree that the bonds forged between Americans and Iraqis in war can pave the way for progress that can be forged in peace," Obama pledged after White House talks Wednesday with Maliki.

"America stands ready to help the Iraqi government build their capacity to provide basic services and to promote the rule of law."

In their first White House meeting since Obama was elected in January, the US leader also pledged to help Baghdad shake off the tough UN sanctions slapped on the country after Saddam Hussein's 1990 invasion of Kuwait.

"I think it would be a mistake for Iraq to continue to be burdened by the sins of a deposed dictator," the US leader said, adding however that any outstanding disputes between Iraq and its neighbors would first have to be resolved.

Maliki had earlier pressed his country's case in talks at the United Nations with UN chief Ban Ki-moon.

"President Obama and the American administration agree with us that Iraq is no longer representing a threat to international peace and security because there is a democracy in Iraq, not a dictatorship," he told reporters, speaking through an interpreter.

The sanctions require that Iraq satisfy Kuwaiti demands on reparations and the return of property, as well as demarcation of their shared border and the repatriation of the remains of prisoners of war.

It was also the first talks between the two men since US troops withdrew from Iraqi cities at the end of June, a milestone in Iraq's rehabilitation after the 2003 US-led invasion.

Violence had dropped markedly throughout the country in recent months, but attacks increased in the run-up to the US military pullback, with 437 Iraqis killed in June -- the highest death toll in 11 months.

And Obama warned: "As we move forward, Prime Minister Maliki and I have no doubt that there will be some tough days ahead.

"There are still those who want to foment sectarian conflict. But make no mistake, those efforts will fail."

Maliki, who on Thursday will visit Arlington National Cemetery to pay tribute to fallen US soldiers, said their talks "reflected the deep conviction on the part of both sides to establish a strategic friendship."

They had discussed ways "to activate the strategic relationship and the economic front, culture front, educational front, commercial front and in every possible area where the United States can play a role in supporting the Iraqi government," he added.

In a sign of the deadly unrest still plaguing Iraq, five Iranian pilgrims died Wednesday when their minibuses were ambushed near restive Baquba, a day after a wave of attacks across the country killed 24 Iraqis.

Maliki voiced confidence in the ability of his nation's forces, saying they had already shown their strength since US troops withdrew from Iraqi cities.

"Those who thought that the Iraqi forces, if the American forces can leave, will be incapable of imposing peace and security, these people proved to be wrong," he said.

Maliki has overseen a considerable transformation in his country since he took office three years ago, at a time of sprawling interfaith violence.

The Iraqi prime minister was also set to meet during his four-day visit with Vice President Joe Biden, Secretary of State Hillary Clinton, Treasury Secretary Timothy Geithner, Defense Secretary Robert Gates, and Democratic House Speaker Nancy Pelosi.

And he is hoping to drum up investment for a country in dire need of rebuilding after years of sanctions and war. His visit will include an investment conference at the US Department of Commerce.