Iraq's slow pace in finding jobs for thousands of former Sunni insurgents could jeopardize security gains as the US military moves to withdraw combat forces from the country next year, the Pentagon said.

In a new report to Congress, the Pentagon said the government of Iraqi Prime Minister Nuri al-Maliki is unlikely to meet its targets for integrating groups known to US military officials as "Sons of Iraq" onto Iraq's security forces and civilian payrolls.

"The slow pace of integration has the potential to undermine Sunni confidence in the (Iraqi government), and, if not corrected, could undermine security progress," the Pentagon said in the 71-page June report titled: "Measuring Stability and Security in Iraq.

The Sons of Iraq comprise about 88,000 Sunni Arabs who refer to themselves as Awakening Councils, or "Majalis al-Sahwa" in Arabic.

Many are former insurgents who battled US and Iraqi forces after the 2003 invasion but later switched sides and joined US troops against al Qaeda in Iraq militants.

That shift in loyalty helped eliminate much of the sectarian violence that threatened to plunge Iraq into an all-out civil war between Sunnis and Shi'ites in 2006.

Once sponsored directly by the US military, the Sahwa movement has been progressively handed over to Baghdad's Shii'te-dominated government.

But relations with Baghdad have been strained by payroll problems and the continued arrest of Sahwa leaders on suspicion of insurgent activity, the Pentagon said.

Baghdad's handling of the Sahwa movement poses an important test for the future of sectarian reconciliation in Iraq.

The Maliki government intends to integrate 20 percent of an estimated 88,383 Sahwa members into Iraq's security forces and move the remainder into civilian government and private sector jobs, according to the Pentagon's report.

But by May 30, only 6,300 or about 7 percent had moved out of the Sunni groups, including just 1,700 who had gone into non-security sector jobs, the report said.

The Pentagon concluded that the pace of integration was not likely to meet the Baghdad government's targets by August 2010, when US combat forces are due to withdraw from Iraq leaving behind a residual force of between 35,000 and 55,000 troops.

There are currently 131,000 US troops in Iraq. – Reuters