Jalal Talabani said Iraqis still faced huge difficulties five years on
Iraqi President Jalal Talabani has singled out violence and corruption as the main problems facing his country on the fifth anniversary of the invasion.
Mr Talabani welcomed the end of Saddam Hussein's era of "torture and tyranny", but warned that violence, terrorism and corruption had now become a "disease".
He also said any further progress would not be possible without reconciliation.
On Wednesday, US President George Bush said the invasion had been "the right decision" and had made the world safer.
He also said that the US military's co-operation with Sunni Arab militias was yielding the first large-scale Arab uprising against Osama Bin Laden, and that last year's US troop surge had opened the door to a major victory.
The BBC's Adam Brookes in Baghdad says there have been no anniversary parades in the Iraqi capital to mark the day in 2003 when air raids on Baghdad signalled the beginning of the US-led offensive.
Iraqis seem to feel little for the anniversary, with security and the search for basic necessities still preoccupying them, our correspondent says.
A statement by President Talabani on Wednesday hailed the overthrow of Saddam Hussein's regime, but also reflected the troubles afflicting his country.
During his 24-year rule, Iraqi prisons were full of "innocent prisoners", he said added, and became "Saddam's theatres for torture and brutal crimes".
The "liberation of Iraq" by US-led forces, Mr Talabani said, was the start of a new era, but he also warned that today's Iraq was still gravely threatened.
"The walk on this new path began five years ago but it faces huge difficulties. There is violence and terrorism and corruption has become a dangerous disease," he said.
The campaign group, Iraq Body Count, says the civilian death toll since March 2003 is between 82,000 and 89,000, although it warns many deaths may have gone unreported. More than 4,000 coalition troops have also been killed.
Election law approved
Shortly after issuing the statement, Iraq's three-man presidential council said an important new law paving the way for local elections by 1 October would now be enacted.
Mr Talabani hailed the US-led overthrow of Saddam Hussein
The law, seen as a vital step in the reconciliation process, was passed by the parliament last month, but had been held up by the council since then after Vice President Adel Abdul-Mahdi said it was unconstitutional.
Mr Abdul-Mahdi's objection was said to centre on an article that would give the prime minister the authority to ask parliament to dismiss a provincial governor.
His party, the Supreme Iraqi Islamic Council (SIIC), won control of many of the provinces in the predominantly Shia south in the last election, but now faces a growing challenge from supporters of the radical Shia cleric, Moqtada Sadr.
The presidency's announcement was welcomed by the Iraqi Prime Minister, Nouri Maliki, in a speech on Thursday.
"Reconstruction and the building of services and culture cannot be achieved in the shadow of economic corruption, manipulation and the placement of dishonest people in sensitive places," he said. "These things must be reviewed before the provincial elections."
'Turned the table'
Mr Maliki's national security adviser, Mouwaffaq al-Rubaie, told the BBC that the "considerable reduction" in violence witnessed in Iraq over the past eight to 10 months could be attributed to a number of factors.
Firstly, the Iraqi security forces reached a "critical mass" in their numbers, preparedness and equipment levels, with the ministries of defence and interior now in command more than 600,000 personnel, he said.
Mr Rubaie said the willingness of so-called Sunni Arab Awakening movements to work with the US and Iraqi forces, and the declaration of a ceasefire by Moqtada Sadr's Mehdi Army militia had, along with the US troop surge last year, also been crucial.
He also noted the Iraqi government's engagement with the neighbouring countries of Iran, Syria and Saudi Arabia, whose porous borders are believed to have been crossed by hundreds of insurgents.
Mr Rubaie said the government now faced a real challenge to maintain the low level of violence witnessed in recent months.
He said this could only be achieved through a policy of "aggressive national reconciliation", which included a comprehensive package of improvements in infrastructure and the provision of services, as well as job creation.
The majority of the criminal acts in Iraq, including attacks by militant groups, were financially motivated, he said.
"Instead of leaving thousands of youngsters in the streets to be picked up by al-Qaeda, we should pay them more than al-Qaeda is paying them," he said.