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BAGHDAD – The United States inaugurated its largest embassy ever on Monday, a fortress-like compound in the heart of the Green Zone — and the most visible sign of what U.S. officials call a new chapter in relations between America and a more sovereign Iraq.

AP – U.S. Deputy Secretary of State John Negroponte, right, and Iraqi President Jalal Talabani look on during

U.S. Marines raised the American flag over the adobe-colored buildings, which sit on a 104-acre site and has space for 1,000 employees — more than 10 times the size of any other American Embassy in the world.

"Iraq is in a new era and so is the Iraqi-U.S. relationship," Ambassador Ryan Crocker proclaimed.

In perhaps an unintended sign of the new relationship, Prime Minister Nouri al-Maliki did not attend Monday's ceremony because he was traveling in Iran, a country the U.S. has accused of aiding and arming Iraqi militants.

Explaining the opening of such a large embassy three years before the U.S. must finish withdrawing its 146,000 troops from Iraq, Crocker told The Associated Press that it is vital for the U.S. to remain involved in nonmilitary ways.

"I think we have seen a tremendous amount of progress," Crocker said before the ceremony, "but the development of this new Iraq is going to be a very long time in the making, and we need to be engaged here."

Crocker said Baghdad was looking to the West for the first time since the Army's 1958 revolution that toppled Iraq's monarchy and set the stage for the ascendance of the Baath party, which dominated Iraq until the 2003 invasion.

"Iraq has defined itself in general hostility to the West and the United States. You now have a fundamentally different state and society taking shape that values those relations, that values those contacts, that wants its children educated in American and other Western universities. And we need to be there as a partner to ensure that those relationships are solidly built and well maintained," he said.

"We will be engaged in different ways as security continues to improve and as Iraqi security forces are more and more in the lead. But that engagement over the long term is key," he added.

The veteran diplomat has served many years in the Middle East, where a lack of U.S. resolve in Lebanon 20 years ago opened that country to meddling from Iran and Syria.

The inauguration of the $700 million embassy came just days after a security agreement between Iraq and the United States took effect, replacing a U.N. mandate that gave legal authority to the U.S. and other foreign troops to operate in Iraq.

Under the new security agreement, U.S. troops will no longer conduct unilateral operations and will act only in concert with Iraqi forces. They must also leave major Iraqi cities by June and the entire country by the end of 2011. Another accord mapped out the bilateral relations.

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

U.S. diplomats and military officials moved into the embassy on Dec. 31 after vacating Saddam Hussein's Republican Palace, which they occupied when they captured Baghdad in April 2003. The palace will now seat the Iraqi government and al-Maliki's office.

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 both 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.

The new embassy's exact dimensions are classified, but it is said to be six times larger than the U.N. complex in New York and more than 10 times the size of the new U.S. Embassy in Beijing, which at 10 acres is America's second-largest mission.

Reinforced concrete surrounds the new compound, which provides housing for hundreds of staff who had been living in makeshift quarters with aluminum walls that provided little protection from mortar rounds that were fired daily into the Green Zone a year ago. "It is from the embassy that you see before you that we will continue the tradition of friendship, cooperation and support begun by the many dedicated Americans who have worked in Iraq since 2003," U.S. Deputy Secretary of State John Negroponte told guests at the ceremony in the complex's courtyard.

Iraqi President Jalal Talabani, a longtime Washington ally, praised President George W. Bush's decision to invade Iraq in 2003 and topple the regime of Saddam Hussein, who was executed two years ago.

"The building of this site would not be possible without the courageous decision by President Bush to liberate Iraq," said Talabani, a Kurd. "This building is not only a compound for the embassy but a symbol of the deep friendship between the two peoples of Iraq and America."

But as U.S. and Iraqi officials lauded progress in the country, 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.

Though violence has plummeted around Iraq in the past year, with attacks dropping from an average 180 a day to just 10, horrific bombings still plague the capital. Many recent attacks have targeted pilgrims during ceremonies commemorating the death of a much revered Shiite saint.

On Sunday, a suicide bomber killed at least 38 people at a Shiite shrine just four miles north of the new embassy.

Iraqi officials said the bomber was a man disguised as a woman. Initial reports said the attacker was a woman concealing a bomb under her black cloak. At least 17 of the dead were Iranian pilgrims.

In response to that attack, Iraqi authorities banned female pilgrims from entering the district for ceremonies on Tuesday and Wednesday.