WASHINGTON (AFP) - US Secretary of State Mike Pompeo on Wednesday (May 6) welcomed Iraq's formation of a government after months of instability, and extended a waiver on Iran sanctions to ease pressure on the new leader.

In a phone call with Prime Minister Mustafa Kadhemi, Mr Pompeo congratulated him on taking office and discussed "working together to provide the Iraqi people the prosperity and security they deserve," the State Department said.

Mr Pompeo said that United States would not enforce sanctions on Iraq buying electricity from Iran for 120 days "as a display of our desire to help provide the right conditions for success", a statement said.

Mr Kadhemi took over on Thursday after winning parliamentary approval for his Cabinet line-up - the third attempt to replace Mr Adel Abdel Mahdi, who resigned last year in the face of nationwide demonstrations against corruption.

Iraqi politicians have the delicate task of balancing relations with Washington and neighbouring Iran, which has deep economic and religious ties with Iraq but is under sweeping sanctions imposed by President Donald Trump.

Recognising Iraq's fragility, the Trump administration has given Iraq a series of waivers on US sanctions to let it keep buying gas from Iran.

The latest had been announced last week and was to run for only 30 days.