BAGHDAD - The US military officially ended its war in Iraq on Thursday, rolling up its flag at a low-key ceremony with Defense Secretary Leon Panetta nearly nine bloody years after the invasion that ousted dictator Saddam Hussein.

A US soldier begins the journey home from Sather Air Base in Baghdad, Iraq, on Dec 15, 2011. About 4,000 US soldiers remain in Iraq but they will leave in the next two weeks. [Photo/Agencies]?

"After a lot of blood spilled by Iraqis and Americans, the mission of an Iraq that could govern and secure itself has become real," Panetta said at the ceremony outside Baghdad's still heavily-fortified airport.

Almost 4,500 US soldiers and tens of thousands of Iraqis lost their lives in the war that began with a "Shock and Awe" campaign of missiles pounding Baghdad, but descended into sectarian strife and a surge in US troop numbers.

US soldiers rolled up the flag of American forces in Iraq and slipped it into a camouflage-colored sleeve in a brief ceremony, symbolically ending the most unpopular US military venture since the Vietnam War of the 1960s and 1970s.

The remaining 4,000 American troops will withdraw by the end of the year, leaving behind a country still tackling a weakened but stubborn Islamist insurgency, sectarian tensions and political uncertainty.

"Iraq will be tested in the days ahead, by terrorism, by those who would seek to divide, by economic and social issues," Panetta told the rows of assembled US soldiers and embassy officials at the ceremony.

Saddam is dead, executed in 2006, while an uneasy politics is at work and the violence has ebbed. But Iraq still struggles with insurgents, a fragile power-sharing government and an oil-reliant economy plagued by power shortages and corruption.

In Falluja, the former heartland of an al-Qaida insurgency and scene of some of the worst fighting in the war, several thousand Iraqis celebrated the withdrawal on Wednesday, some burning US flags and waving pictures of dead relatives.

Iraq's neighbors will watch how Baghdad tackles its problems without the US military, while a crisis in neighboring Syria threatens to upset the region's sectarian and ethnic balance.

US President Barack Obama, who made an election promise to bring troops home, told Iraqi Prime Minister Nuri al-Maliki that Washington will remain a loyal partner after the last troops roll across the Kuwaiti border.

Iraq's Shiite leadership presents the withdrawal as a new start for the country's sovereignty, but many Iraqis question which direction the nation will take without US troops.

"I am happy they are leaving. This is my country and they should leave," said Samer Saad, a soccer coach. "But I am worried because we need to be safe. We are worried because all the militias will start to come back."

Some fear more sectarian strife or an al-Qaida return to the cities. A squabble between Kurds in their northern semi-autonomous enclave and the Iraqi Arab central government over disputed territories and oil is another flashpoint.

Violence has ebbed since the bloodier days of sectarian slaughter when suicide bombers and hit squads claimed hundreds of victims a day at times as the country descended into tit-for-tat killings between the Sunni and Shiite communities.

Reuters