BAGHDAD, Iraq -- The Bush administration on Tuesday welcomed the formation of a new Iraqi interim government and suggested it would help ease the way for winning support for a U.N. resolution seeking to set the stage for stability in Iraq.

In a Rose Garden news conference, President George W. Bush hailed the new Iraqi leaders and said the creation of the government, by U.N. envoy Lakhdar Brahimi, "takes us one step closer to realizing the dreams of Iraqis." He said the interim body has the "talent, committment and resolve to guide Iraq through challenges that lie ahead."

"This is a very hopeful day for the Iraqi people ... and the American people," he said.

Bush warned that despite the "progress," Iraq still faces "violent people who oppose freedom." He said violence likely sould increase as militants test the strength of the new government. There have been deadly car bomb blasts in Baghdad and the north since the new leaders were announced.

National security adviser Condoleezza Rice portrayed the formation of the new government as an "extremely important" step to begin to end the U.S.-led occupation of the country.

The head of Iraq's Governing Council, Ghazi Mashal Ajil al-Yawer, was named president of the interim government after the Americans' preferred candidate turned down the post.

EYE ON IRAQ Video: Obama VFW Speech, Uncut Video: Obama On Vets Benefits Video: Obama Rips Defense Spending Video: Afghan Push 'War Of Necessity' Slideshow: Iraqis Celebrate Full Coverage: Iraq War Interactive: How We Got Here Section: President Obama Survey: Support Obama's Iraq Strategy?

The selection to the largely ceremonial position broke a deadlock over the makeup of a new Iraqi government set to assume power June 30. The council then decided to dissolve immediately rather than remain in office until the transfer of sovereignty. A senior U.S. official said the Coalition Provisional Authority will remain sovereign until June 30.

"These are not America's puppets," Rice told reporters. "I can tell you firmly and without any contradiction, this is a terrific list and really good government and we're very pleased with the names that emerged."

Video

Bush Hails New Interim Government

Bush echoed Rice's statements, saying, "I had no role in picking. Zero."

Brahimi congratulated the council on selecting al-Yawer as president after the U.S. choice said no to the largely ceremonial post.

Al-Yawer called the interim government a step forward, while Prime Minister-designate Iyad Allawi said Iraq is beginning its march toward sovereignty. Al-Yawer has been critical of the United States but also denounced violence against coalition forces.

Allawi Backs Keeping U.S. Troops Around

Iraq's new prime minister made clear Tuesday he wants troops from the U.S.-led coalition to stay.

Allawi said Iraq needs help from those forces, to defeat what he calls "the enemies of Iraq."

His statement is seen as setting the stage for an agreement from Iraq's new government, letting the coalition troops keep operating.

At a ceremony presenting the interim government, Allawi said Iraqis don't like living under foreign military occupation but added that Iraqis need help defeating their enemies and will enter into agreements with allies to accomplish that goal.

3 Dead, 20 Hurt In Bombing In Baghdad

At least three people were killed and 20 hurt in a car bombing Tuesday outside Kurdish headquarters in Baghdad.

The Patriotic Union of Kurdistan has its headquarters near the green zone headquarters of the U.S.-run coalition.

The blast ripped through the building shortly after a party attended by hundreds of people. The event was intended to celebrate the founding of the Patriotic Union of Kurdistan, which is seen as being close to the Americans.

A U.S. military spokesman said most of the injured were outside the offices and were struck by flying glass.

Television footage showed debris and a charred wall of a building. Arab TV stations initially reported that about 10 people were killed.

11 Iraqis Killed, 23 Hurt

Eleven Iraqis were killed and 23 other people hurt, including two Americans, in a roadside bombing Tuesday near a U.S. military base in northern Iraq.

Seven of the dead Iraqis were members of the Iraqi Civil Defense Corps. Two of the wounded were soldiers from the 1st Infantry Division.

The blast occurred outside the gates of the 1st Infantry Division's forward operating base in Beiji, about 155 miles north of Baghdad.