The Iraq war has entered its sixth year with US President George W Bush saying it has made the world a safer place.
Iraqi President Jalal Talabani has singled out violence and corruption as the main problems facing his country on the fifth anniversary of the invasion.
He also said that US work with Sunni Muslims in Iraq was yielding the first large-scale Arab uprising against Osama Bin Laden's al-Qaeda terror group.
Mr Talabani welcomed the end of Saddam Hussein's era of "torture and tyranny", but warned that violence, terrorism and corruption had now become a "disease".
In a statement marking the anniversary Iraqi President Jalal Talabani hailed the end of Saddam Hussein's "tyranny".
He also said any further progress would not be possible without reconciliation.
But he said the invasion had brought "violence and terrorism", and that corruption had become a "disease."
On Wednesday, US President George Bush said the invasion had been "the right decision" and had made the world safer.
There have been anti-war protests in several US cities amid mounting opposition to the war and its costs.
He also said that the US military's co-operation with Sunni Arab militias was yielding the first large-scale Arab uprising against Osama Bin Laden, and that last year's US troop surge had opened the door to a major victory.
Local reaction
No celebration
The BBC's Adam Brookes in Baghdad says there will be no anniversary parades in the Iraqi capital to mark the day when air raids on Baghdad signalled the beginning of the war to oust Saddam Hussein.
The BBC's Adam Brookes in Baghdad says there have been no anniversary parades in the Iraqi capital to mark the day in 2003 when air raids on Baghdad signalled the beginning of the US-led offensive.
Iraqis seem to feel little for the anniversary, our correspondent says, security and the search for basic necessities still preoccupies them.
The division is not between the people... it's a political division and the political division can be solved through correct distribution of wealth and power Saad Yousef al-MutalebIraqi Ministry of Reconciliation Iraqis seem to feel little for the anniversary, with security and the search for basic necessities still preoccupying them, our correspondent says.
A statement by President Talabani on Wednesday hailed the overthrow of Saddam Hussein's regime, but also reflected the troubles afflicting his country.
The violence has diminished in the last year, in part thanks to an increase in US forces, which saw the deployment of an extra 30,000 troops.
"The brutal regime of the dictator fell... the regime that ruled Iraq for decades, the decades of darkness. The decades that were of tyranny," Mr Talabani said.
"The surge has done more than turn the situation in Iraq around - it has opened the door to a major strategic victory in the broader war on terror," Mr Bush said in his speech on the eve of the anniversary.
During his 24-year rule, Iraqi prisons were full of "innocent prisoners", he added, and became "Saddam's theatres for torture and brutal crimes".
Our correspondent says that also crucial have been a new willingness by Sunni groups to work with Iraq's government and military and a ceasefire on the part of one of the biggest Shia militias - Moqtada al-Sadr's Mehdi army.
Mr Talabani hailed the US-led overthrow of Saddam Hussein
But, our correspondent says, even the US generals say there can be no military solution to the conflict.
Mr Talabani said Saddam had "wasted" Iraq's oil wealth by leading into a series of wars and "violated all values of humanity" when crushing internal dissent.
Election approval
The "liberation of Iraq" by US-led forces, he said, was the start of a new era, but he also warned that today's Iraq was threatened by violence and corruption.
In a statement marking the fifth anniversary, Mr Talabani warned that "the march that started five years ago will not succeed" unless Iraqis can achieve "real reconciliation among our people".
The campaign group, Iraq Body Count, says the civilian death toll since March 2003 is between 82,000 and 89,000, although it warns many deaths may have gone unreported. More than 4,000 coalition troops have also been killed.
On Wednesday, a law paving the way for provincial elections, seen as vital for reconciling Iraq's warring factions, was finally given presidential approval.
Election law approved
Mr Bush praised the results of working with Sunni militiasBut, our correspondent said, other crucial laws governing the future shape of Iraq are still languishing.
Shortly after issuing the statement, Iraq's three-man presidential council said an important new law paving the way for local elections would now be enacted.
In his speech, Mr Bush said that overthrowing Saddam Hussein had been "the right decision" and he dismissed what he called "exaggerated estimates" of the war's price tag.
"The costs are necessary when we consider the cost of a strategic victory for our enemies in Iraq," he said.
Mr Bush argued that fighting Islamic militants in Iraq helped to prevent attacks on targets in the US.
"The terrorists who murder the innocent in the streets of Baghdad want to murder the innocent in the streets of American cities," he said.
Protests
He also made the case that by working with Sunni Arabs from so-called Awakening Councils to defeat al-Qaeda, the US was successfully driving a wedge between militants and the Arab mainstream.
"In Iraq," he said, "we are witnessing the first large-scale Arab uprising against Osama Bin Laden. And the significance of this development cannot be overstated."
Protesters against the Iraq war demonstrating in Washington DC give their viewsIn pictures
Protesters against the Iraq war demonstrating in Washington DC give their viewsIn pictures
He made no reference to the fruitless search for weapons of mass destruction in Iraq - a major justification for launching the war.
The law, seen as a vital step in the reconciliation process, was passed by the parliament last month, but had been held up by the council since then after Vice President Adel Abdul-Mahdi said it was unconstitutional.
Anti-war protests were held in several US cities on Wednesday, including Washington, New York, Miami, Chicago, Los Angeles and San Francisco, amid mounting opposition to the war and its costs.
Mr Abdul-Mahdi's objection was said to centre on an article that would give the prime minister the authority to ask parliament to dismiss a provincial governor.
As Mr Bush spoke, 32 people were arrested protesting in front of the Internal Revenue Service building in Washington.
His party, the Supreme Iraqi Islamic Council (SIIC), won control of many of the provinces in the predominantly Shia south in the last election, but now faces a growing challenge from supporters of the radical Shia cleric, Moqtada Sadr.
They were trying to draw attention to taxpayers' money funding the war.
Saad Yousef al-Mutalebi, a spokesman for the ministry of reconciliation in Baghdad, told the BBC that Iraq was now more affected by political, rather than social divisions.
"We wanted to put our bodies between the money and what that money goes to fund - the war, the occupation, the bombs," said Frida Berrigan from the War Resisters League.
"I think we're moving to a new stage now," he said. "The division is not between the people themselves... it's a political division and the political division can be solved through correct distribution of wealth and power."
Estimates of what the war has cost vary considerably. The non-partisan Congressional Budget Office estimates $600bn (£300bn) has been spent on the war so far, including this year's appropriations.
Nobel-prize winning economist Joseph Stiglitz calculates that the war will cost $3 trillion (£1.5 trillion) once health care for veterans and future economic losses are considered.
Meanwhile, our correspondent in Baghdad says that Iraqis appear to remain overwhelmingly opposed to the presence of foreign troops in their country, though, strikingly, polls show a majority do not want the US pull out yet, but only when the country is much safer than it is now.
