Political leaders around the world welcomed the surprise early transfer of power to an interim Iraqi government, but many said that other measures must follow if the country is to achieve peace and full independence.

"All we want is . . . that the Iraqi government is able to exercise its sovereignty and authority in a way that acquires credibility," Amr Moussa, secretary general of the 22-member Arab League, told reporters in Cairo, according to news services.

The European Union, in a statement, said that "the handover of authority to the interim government was only the first step in a much longer process. Many challenges will need to be overcome before Iraq can truly call itself a free and democratic state."

President Jacques Chirac of France, who last year led international opposition to the war, also expressed ambivalence. "The return of the sovereignty of Iraq is, in my eyes, a necessary condition, unfortunately not sufficient, to the reestablishment of peace," he said at the NATO summit in Istanbul, according to news service reports.

The Chinese government issued a statement congratulating Iraqis and said it hoped their country would be "independent, peaceful and prosperous."

Arab governments allied with the United States generally welcomed the news. Kuwait announced it was reestablishing diplomatic relations with Iraq that were halted after Iraq occupied the country in 1990.

The Saudi Arabian cabinet declared in a statement that "we are pleased about the transfer of power in Iraq so that Iraq may regain its sovereignty."

Many ordinary Arabs were suspicious of the move, however.

"The United States wants Iraqis to fight Iraqis and reduce the rising cost of its military presence in the country. The world opinion will not swallow this sham transfer of authority," said Mustapha Ramid, a member of the Moroccan Parliament from the moderate Islamist Justice and Development Party, the Reuters news agency reported.

Samir Eid, 52, owner of an antique shop in Cairo, said that the Americans "chose the government now in Iraq so it's going to do what they want," according to the news agency.

European governments opposed to the war said that the handover would not change their reluctance to send troops to Iraq.

Chirac said any training of Iraqi security forces conducted by the NATO alliance should take place outside of the country. Spain and Germany also reiterated opposition to sending troops.

Still, German Chancellor Gerhard Schroeder sent a congratulatory telegram to Ayad Allawi, the interim Iraqi prime minister. "For your responsible task of preparing democratic elections, improving security and supporting the economic development of your country," he wrote, according to a text released in Berlin. "I wish you every conceivable success. The German government hereby offers the Iraqi government its trusting cooperation."

Countries that already have troops in Iraq hailed Monday's handover. The governments of Poland, Italy and Denmark, among others, have all voted in recent weeks to extend their troop deployments.

Rob Blackhurst, an analyst with the London-based Foreign Policy Center, said most European leaders were relieved to see the early handover and were impressed with the efforts by Allawi to distance his government from the U.S.-led occupation.

"There's a sense of relief here that the worst of the transatlantic storm may be over," Blackhurst said.

But he added that President Bush's icy reception at a meeting with EU leaders in Ireland over the weekend indicated that the wounds over the war remained deep and that most Europeans would love to see Democrat John F. Kerry win the presidential election in November.

Britain's former foreign secretary, Robin Cook, who resigned from the cabinet last year in protest against the war, said on the BBC that the handover should have taken place a year ago.

"If we'd done that, we might have avoided some of the mistakes of the past year," he said.

Correspondent Glenn Frankel in London and special correspondent Shannon Smiley in Berlin contributed to this report.