U.S. diplomats and military officials moved into their new embassy in Iraq on Dec. 31 after vacating Saddam Hussein's Republican Palace, which they occupied when they captured Baghdad in April 2003.

"Iraq is in a new era and so is the Iraqi-U.S. relationship," Ambassador Ryan Crocker said during an inauguration ceremony Jan. 5.

But as Crocker lauded progress in Iraq, Baghdad was rocked by a second day of violence that saw four car bombs explode in various parts of the city, killing four people and wounding 19 others. It came a day after a suicide bomber killed at least 38 people at a Shiite shrine just 6 km north of the site of the new embassy.

Crocker said that since the 2003 invasion, "perhaps no single week has been more important than this past week. On Dec. 31, we left the Republican Palace."

For nearly six years, the grandiose and gaudy palace, with its gold-plated bathroom fixtures, wall paintings of Scud missiles and enormous chandeliers, served as headquarters for occupying forces and the hub for the Green Zone — the walled-off swath of central Baghdad that was formally turned over to the Iraqi government on New Year's Day.