MARK Latham is retreating on his promise to pull Australian troops out of Iraq by Christmas, suggesting almost a third of the contingent could stay on under a Labor government to guard diplomats in Baghdad.
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As the pressure mounted on Labor from the US to stay the course, new Iraqi president Sheikh Ghazi al-Yawer also appealed for Australian soldiers not to abandon the country.

Mr al-Yawer said: "I'm not going to talk about how disastrous" it would be for Australia to withdraw from Iraq, echoing comments from US President George W.Bush, who last week urged the Opposition to rethink its policy.

"We would really welcome having Australia keep participating in peacekeeping and stability-keeping in Iraq," he said in Washington after praising the contribution of Australian troops.

Mr Latham, in a reversal of his hardline position, said yesterday that Labor would consider keeping a detachment of troops -- about 90 of the 270-strong force now in Iraq -- to protect staff in Australia's representative office in Baghdad, if that was the security advice.

After saying Labor would leave enough troops to protect diplomatic staff, Mr Latham added that a Labor government would take advice "about what needs to be done -- whether that means leaving troops there or some other arrangement".

Mr Latham then agreed he wouldn't be pulling the troops out "lock, stock and barrel", and said: "It might mean leaving some troops there; it might mean some other arrangement, so we'll just take that advice when it comes."

Senior Labor sources said yesterday that Mr Bush was desperate to keep Australia in the coalition of the willing, fearing a "domino effect" if Australia pulled out.

The issue is particularly sensitive, following the withdrawal of Spain in the wake of the Madrid bombings.

"The Labor Party is exhibiting an anti-American slant not only in Mr Latham's personal attack on the President, but also the indifference they are displaying towards keeping our forces in Iraq," Mr Howard said.

"It is in Australia's interests to go the distance and do the right thing. It is Australia's interests to have a close alliance with the United States.

"I have no doubt that the indifference of Mr Latham towards the alliance would present problems if he became prime minister."