As Iraq is taking control of its towns and cities from U.S. forces, U.S. President Barack Obama cautioned Iraq could face hard time ahead but he pledged to remain a strong partner to Iraq in assuring its security.

Speaking at a U.S. Independence Day celebration, Obama said Iraq's destiny was now in the hands of its own citizens.

President Obama spoke very high of American troops when he said, "Because of the courage and capability and commitment of every American who has served in Iraq, a sovereign and united Iraq is taking control of its own destiny."

It is worth mentioning here that under the first step of a bilateral security pact, U.S. combat troops pulled out of Iraq's towns and cities on Tuesday into rural bases.

By 2012, all U.S. troops will have left Iraq.

However, both America and Iraq are concerned about militant attacks.