Washington: US President George W Bush said today (June 1, 2004) "many challenges remain" in Iraq despite the appointment of a new Government.

"The naming of the new interim Government brings us one step closer to realising the dream of millions of Iraqis, a fully sovereign nation with a representative Government that protects their rights and serves their needs," Bush said in comments at the White House.

But "many challenges remain", he added, because of the threat from insurgents who have led a violent campaign against the US-led occupation.