-- The United States and Britain presented the U.N. Security Council on Monday with a draft resolution that would formally transfer authority in Iraq to a "sovereign interim government" on June 30 but ensure that U.S. armed forces maintain military control over the country for at least another year.

The resolution would authorize U.S.-led multinational forces to "use all necessary measures" to keep the peace and fight terrorist elements challenging the interim government. Its mandate would be subject to review by the Security Council within 12 months or by a transitional Iraqi government to be elected by January 2005.

France, Germany, Russia and China expressed misgivings about the resolution, saying it does not offer full sovereignty to Iraqis. Envoys from those governments said the resolution would not resolve many key political issues, including the extent of Iraqis' control over their security forces in the months ahead and the duration of the multinational force's stay in Iraq.

German Chancellor Gerhard Schroeder said the new Iraqi government "must be able to make decisions over security issues, or else it won't be truly sovereign." Still, Germany's U.N. ambassador, Gunter Pleuger, said the text represents "a good basis for discussion."

The 15-nation Security Council will resume negotiations on the draft on Wednesday. U.S. and British officials said they hope to have the resolution adopted by early next month.

Council envoys from France, Russia and several other countries have insisted that Iraqis be given control over their police and the right to veto U.S. orders to send Iraqi forces into combat. China's U.N. ambassador, Wang Guangya, said he and other council envoys would introduce amendments to "improve" the text.

"We need to give more say to the Iraqis on the role that will be played by the multinational force and also the duration" it can remain in Iraq, Wang said. "It seems that it will be staying there even beyond 12 months."

The United States and Britain yielded to pressure from other Security Council members and Iraq's most influential cleric, Grand Ayatollah Ali Sistani, to omit any reference in the resolution to a March 8 interim constitution, called the Transitional Administrative Law, that was signed by the U.S.-led Coalition Provisional Authority and the U.S.-appointed Iraqi Governing Council.

The United States had hailed the agreement, which enshrined broad protections for individual rights and established a framework for democratic self-rule. But Sistani objected to language that provided Iraq's Kurdish minority with an effective veto over a permanent constitution and the power to potentially block major decisions by a Shiite president.

The omission could generate concerns among Kurdish leaders that their interests are not being protected.

Senior U.S. and British officials said Monday that the most sensitive security issues will be handled in a separate letter from the U.S. commander of the multinational force to the new interim government. The government would then ask the Security Council to endorse the terms of the security agreement.

The Bush administration's effort to seek the council's endorsement of the political transition comes as U.S. and U.N. officials scramble to name the leaders of the interim government, which will administer the country until national elections are held between December of this year and Jan. 31, 2005.

A senior U.S. official said the United States would delay a vote on the resolution until the United Nations' special envoy to Iraq, Lakhdar Brahimi, returns to New York to brief the council on his efforts to identify key leaders of the interim government, including a president, prime minister and two vice presidents. The U.S. official said: "Brahimi's preference and ours is to have the interim administration named and settling in by the end of this month."

In addition to providing the United States with a legal basis for its presence in Iraq, the resolution would lift an arms embargo on the Iraqi government, outlaw the shipment of weapons and funds to terrorist infiltrators, and authorize the creation of a "distinct entity within the multinational force" to provide security to U.N. personnel serving in Iraq.

It also calls on the United States and its military allies to establish a new Iraqi police force and army that can "progressively" assume responsibility for the country's security.

James Cunningham, the U.S. deputy representative to the United Nations, acknowledged that "there is nothing in the resolution" that grants Iraqis the authority to compel U.S. forces to withdraw after an elected government takes power. But he said the United States "has said that we will leave if there is a request from the government to leave."

The resolution would also grant the interim government the authority to disburse funds generated from Iraq's oil exports, subject to monitoring by an international board. It would require the Iraqis to continue to set aside 5 percent of oil revenue to compensate individuals and companies, primarily from Kuwait, who suffered financial losses in the 1991 Persian Gulf War.

Several Iraq creditors, including Russia, Germany and France, are considering forgiving billions of dollars in Iraqi debt. They have insisted that Gulf War claimants do the same.