"Today ambassadors agreed to give direction to the military to further develop the mission," NATO spokesman James Appathurai told reporters. "That guidance includes ... the establishment of an Iraqi center of excellency."

The agreement came following a week of diplomatic scrambling after objections by France to details of the accord held up its adoption.

NATO leaders agreed at a summit in Istanbul in June to launch the training mission, after overcoming reservations from France which opposed the idea of NATO "planting its flag" inside Iraq.

"We're very pleased that this step has now been taken," said Appathurai, who emphasized that NATO "assistance is for training, equipment ... not combat."

He said the center could be operational by the end of the year.

The Atlantic Alliance already has some 40 soldiers in Iraq training army officers in collaboration with the defence ministry in Baghdad. The United States, backed by Britain, has pushed hard for the mission to be enlarged.

The US ambassador to NATO welcomed the agreement.

"Today's decision marks a major step by the alliance," Nicholas Burns told reporters.

"The US is proud to undertake with its allies a significant expansion of the mission in Iraq including the creation of a permanent training center that will help prepare officers in Iraq's security forces to adress the security challenges facing the new Iraq."

Yet the NATO mission will remain modest, probably no more than several hundred training staff, as the alliance's 26 members remain divided over Iraq.

It emerged last Friday that France and Belgium among others were unhappy with details of the expansion plans, notably how the mission would be funded and protected, and the extent of the officer training involved.

Appathurai said "NATO will provide close area protection" for the center.

Earlier Wednesday a NATO official declined to give details of how big the training mission would be, pointing out that military planners would work out the details after political agreement on the mission is reached.

But he said numbers were likely to be in the "low hundreds" in terms of training staff, without taking account of troops needed to protect them.

Burns said "the US has offered to provide considerable financing and other resources (to the mission) including training officers and soldiers to protect them."

NATO's military staff is now to come up with an operational plan and details for the enlarged training mission by October 9 for approval by the North Atlantic Council (NAC), the top decision-making body of the North Atlantic Treaty Organization.

All questions should be resovled so NATO defense ministers can give the mission the green light at their informal meeting in Romania on October 13 and 14, according to diplomats.

The conflict in Iraq has soured relations within NATO, which last year plunged into its worst-ever crisis when France and Germany spent weeks leading opposition to alliance help for Turkey in the run-up to the US-led invasion.

NATO officials insist that the discord over the Iraq training mission, while prolonged, has not been on the same scale as last year's pre-war crisis.