Combined figures obtained from the defence, interior and health ministries showed that 240 civilians, 18 soldiers and 58 policemen lost their lives.
They were the lowest monthly figures since February 2006 and compared with a total of 340 Iraqi deaths in November and 317 in October.
In all, 6,226 Iraqis were killed in Iraq last year, down from 6,772 in 2007, according to the ministry figures.
Figures compiled by Iraq Body Count also showed a sharp fall in civilian deaths last year but the British-based non-governmental organisation gave a higher absolute death toll for 2008 as it had for previous years.
The group said that between 8,315 and 9,028 Iraqi civilians were killed last year compared with between 22,671 and 24,295 in 2007 and between 25,774 and 27,599 in 2006.
Mirroring the reduction in Iraqi deaths, combat deaths among US troops fell to 314 last year, down from 904 in 2007 and their lowest level since the 2003 invasion, according to independent website www.icasualties.org.
A total of 14 service personnel died in December, close to the post-invasion monthly low of 13 recorded in July.
In all, 4,220 US service personnel have been killed in Iraq since 2003, according to an AFP toll based on the icasualties.org figures.
US commanders say attacks of all types are down sharply although insurgents are still able to strike throughout the country.
The most restive areas are the main northern city of Mosul and the town of Baquba, north of the capital, but Baghdad itself also remains the target of frequent attack.
The Iraqi ministries said that US and Iraqi security forces also killed 2,028 insurgents last year and made 13,000 arrests. -- AFP