The US Senate on Thursday, following the lead of the House of Representatives, approved $120bn in new funds for the wars in Iraq and Afghanistan without a timetable for withdrawing combat troops.
By a vote of 80-14, the Senate passed the emergency funding bill, sending it to President George W. Bush, who is expected to promptly sign it into law.
The legislation will fund war operations until September and draw to a close months of wrangling between Congress and the White House.
The bill includes “benchmarks” to assess progress by the Iraqi government.
In exchange for the dropping of clauses calling for a timetable for withdrawal, Mr Bush agreed to Democratic demands for about $17bn (£8.5bn) in spending on domestic programmes, such as disaster relief and the first increase in the minimum wage in a decade.
While the bill is a blow to the liberal wing of the Democratic party, which has been pushing for a clear 2008 deadline for the withdrawal of US troops, the Iraq spending compromise marks a temporary end to almost five months of jostling between the new Democratic-controlled Congress and Mr Bush.
At a White House press conference on Thursday, Mr Bush reaffirmed an informal September timeline to judge the outcome of his 30,000 troop “surge”, which began in early March. The last of the five extra battalions ordered to Iraq would only be in place by mid-June, he said.
However, Mr Bush also warned that the number of US casualties, now standing at more than 3,400, could continue to rise sharply in the next few months as US troops moved into the bloodiest areas of Baghdad, such as Sadr City.
“It could be a bloody – it could be a very difficult August,” he said.
Democratic leaders have said they plan a tougher legislative counter-offensive to Mr Bush’s Iraq strategy in September.
A number of Republicans, including John Warner, the senior Republican on the Senate armed services committee, have also made clear that their patience with the conduct of the war is running out.
“If they [conditions in Iraq] continue to worsen as they have been in the past month it seems to me that would be an opportune time to call upon a shift in strategy further in the direction of the Baker-Hamilton report,” Mr Warner said.
That report, by James Baker, the former Republican secretary of state, and Lee Hamilton, a former Democratic lawmaker, which was published last December, recommended a “regional diplomatic offensive” to try to persuade Iraq’s neighbours to help stabilise the country.
It also proposed the withdrawal of US combat troops by 2008.
While bill includes no timetable for withdrawal, it does state that US troops would leave the country if requested to do so by the Iraqi government.
The first funding bill passed by the Democratic-controlled Congress was vetoed by Mr Bush.
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