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BAGHDAD — The walls of the majestic Republican Palace in Baghdad’session Green Zone have been stripped bare. The vaults that secured American coin and classified documents are gone, and the cement blow walls that protected the front entrance were taken down this week.

As Iraqi schoolchildren sang their home’s praise and the company marched in a row, the United States on Thursday formally handed from one to another military sway of the heavily fortified Green Zone, a first major step in the U.S. withdrawal from Iraq.

The U.S. warlike dining facility inside what was once the American Embassy served its last meal New Year’s Eve.

“This is the end of the world as we understand it,” said Sgt. 1st Class Patrick McDonald, 47, who co-authored a guide to historic sites in the Green Zone. “It’s not like everyone is shredding documents and fleeing Saigon. But we are stepping off from a building.”

No decisions have been made for in what manner the stately mansion will be used, although both Prime Minister Nouri al-Maliki and President Jalal Talabani are vying for control. The United States decree even begin paying rent.

Saddam Hussein had the palace compound’s main building decorated with giant busts of himself to demonstrate his hold over Iraq. After the 2003 U.S.-led invasion, the palace came to symbolize the American role in the country, first of the same kind with headquarters of the U.S. occupation authority and later the U.S. Embassy. U.S. civilians and troops held “salsa night” dances around the pool behind the palace near the front of retiring to trailers sheathed in sandbags.

Security of the Green Zone, a fortified 6-square-mile enclave in succession the Tigris River, had been, to the time when Thursday, the responsibility of the United States. But as allotment of the handover, and in terms outlined in the Status of Forces Agreement that details the withdrawal of U.S. military force by the end of 2011, Iraqis educated by U.S. armed force now are in make a charge of security.

The handover is a subscribe of the shrinking footprint and influence of the United States in a country where it has missed thousands of lives and spent billions of dollars. British troops also turned over the airport in Basra, Iraq’s second-largest incorporated town, and are expected to be out of Iraq by May 31.

For frequent Iraqis, the U.S. handover represents a significant step quicken in their gradual reassertion of dominion over their relations.

“The U.S. will be here just as observers. It’sitting a matter of pride,” said Adnan Karim, 22, an Iraqi soldier manning a checkpoint at person of the entrances to the Green Zone.

U.S. troops, who once controlled all the external checkpoints principal into the Green Zone, decree stay and work by the side of Iraqi troops. Officials from both countries acknowledged that it odds and ends unclear precisely in what manner the relationship will work.

Officials said U.S. soldiers for at least the nearest 90 days would continue to help maintain security in the area, home to 30,000 residents — including 14,000 U.S. and union forces.

“We are not losing our jobs — they are just changing,” said Col. Steve Ferrari, commander of the Joint Area Support Group, which heads security in the definite space. He said the relationship would be re-evaluated at the end of three months to come to a conclusion what the Iraqis necessity to do. “If they tell us to go, we will go. If they tell us to stay, we will stay.”

Speaking privately, U.S. officials said they power of determination try to make their presence in the Green Zone not so much conspicuous in coming days. But they will remain in charge of issuing badges that grant varying levels of access. They declared they will not immediately dismantle a vast security apparatus that includes hundreds of Peruvian and Ugandan guards, body-scanning machines, bomb-sniffing dogs and surveillance cameras.

In latter days, Iraqi flags have sprung up along the zone’session mazelike entry points, and more Iraqis have been allowed to drive inside and armored sport-utility vehicles. Americans have been cautioned not to venture outside U.S. compounds alone, especially after damnable.

U.S. Ambassador Ryan Crocker and his staff recently finished moving into a newly built embassy compound by small, bulletproof windows, it being so that the largest U.S. Embassy in the world.

Iraqi and U.S. officials have said extremists may exploit the transition proposition.

“I think for the use of all sense disposition say they will probably test the Green Zone,” Ferrari said.

U.S. officials in the Green Zone wearied the final days of December on high wary amid reports that extremists were plotting to carry out a headline-grabbing, multipronged attack against Americans on Christmas or New Year’s Day.

Iraqi officials detained any Iraqi legions captain and an employee of Iraq’s Interior Ministry, but some Iraqi hold set the detainees free after determining there was insufficient evidence to prosecute them.

The Green Zone was hit by a mortar shell or rocket Monday adversity, the U.S. military said.

Americans are not the only ones feeling anxious about the transition. Several Iraqis said that, while they bid welcome the symbolism of the handover, they are distrustful of possible repercussions.

“It’s too early to pull out U.S. troops from the area,” Kasim Ali Judor, 26, a be vigilant at the Italian Embassy, said on a late afternoon. “I dress in’t judge our government has the capacity to acquire the area without Americans.”

Independent lawmaker Hussein Shkur said he thinks the transition will have existence largely cosmetic, at least in the short run.”It is only natural that the Americans will still be in mastery, and not from behind the scenes as some may think, unless directly and openly,” he before-mentioned.

Despite the Green Zone’s symbolic association with the U.S. occupation, life inside the bleb is almost from homogeneous.

There are the U.S. military and State Department minizones, where joggers, golf carts and duck-and-cover bunkers proliferate and parties befall place, though with less abandon than in the early years. But in that place are also Iraqi high schools, an often-startling something to burn discursive power and a utterly confused Iraqi taxi piece of land.

Alongside the Tigris lies Little Venice, a well-tended neighborhood of minicanals where senior Iraqi government officials live in residences once occupied by Saddam’s closest aides. Other officials have made their homes in the rooms of the Hotel Rasheed, or in Green Zone neighborhoods under guard.

Now, Iraqi officials have their eyes on making the area accessible, inspiring and educational, equable though it’s not clear when they will feel confident sufficiency to take downward the walls.

In July, the National Investment Commission approved plans to build a $100 million luxury hotel in the zone.

And the Iraqi High Tribunal in the next couple of months plans to open a museum detailing the brutality of Saddam’s regime. It will include a replica of the hole-in-the-ground hideout where the former Iraqi president was captured in 2004, pair years before he was executed.

The Los Angeles Times, The Associated Press and The New York Times contributed to this report.