"You and your buddies have removed a horrible dictatorial regime that was a threat to its own citizens, a threat to the region and a threat to the world," he told an audience of some 200 in Baghdad.

He noted that this month also saw the anniversary of the killing of 5,000 Kurds by Saddam Hussein's regime in a gas attack on the Kurdish town of Halabja in 1988, and the beginning of the process of finding and destroying its weapons of mass destruction after the first Gulf war in 1991.

"Now we don't have to worry about that any more on this March day, this one year commemoration of the beginning of the war," Powell said.

He added, to thunderous applause, "Be proud of your work."

Powell's schedule included a meeting with US overseer of Iraq Paul Bremer and was later expected to see members of the US-appointed governing council, before giving a press conference.

The secretary of state arrived in Iraq from neighbouring Kuwait, where he held talks with officials on the first leg of a Gulf tour that will also take in Saudi Arabia.

Citing security reasons, the State Department has refused to discuss even the basics of Powell's itinerary.

Topics for Friday's talks included the situation in Iraq, the Middle East peace process and reform in the Arab world, according to an official who declined to say exactly whom Powell would be meeting or the timing of the talks.