U.S. President Barack Obama's message this weekend that Iraq would chart its own course may have been welcome news for war-weary Americans, but it has fuelled anxieties about the future among Iraqis.

The war is not ending. The war against terrorism continues here, Nuri al-Moussawi, a 51-year-old Baghdad resident, said.

Obama said Saturday the end of U.S. combat operations on Tuesday, and a fall in U.S. troop numbers to 50,000, helped fulfil a promise he made during the 2008 presidential campaign to end the 7-1/2-year war launched by his predecessor, George W. Bush.

But the failure of Iraqi leaders to form a new government almost six months after elections, and persistent attacks by insurgents, have done little to instil confidence among Iraqis.

The American withdrawal is hasty. The capabilities of our army have not been built yet, Moussawi said.

Overall violence has fallen sharply since the peak of sectarian carnage in 2006/07. Nevertheless, like many Iraqis, Moussawi has little faith in the abilities of Iraq's 660,000-strong police and army to protect the country.

Toppled dictator Saddam Hussein's once feared armed forces were disbanded by U.S. administrators shortly after the 2003 U.S-led invasion and Iraq's army, police, navy and air force had to be rebuilt from scratch.

Suspected Sunni Islamist insurgents have put the domestic security forces to the test, killing 57 at an army recruitment centre on August 17 and more than 60 when suicide car bombers attacked police stations around the country on August 25.

Obama's remarks were seen as a preview of a televised address he plans to give Tuesday evening from the White House Oval Office. The White House is trying to emphasise Obama's accomplishments ahead of November elections when his fellow Democrats face war-weary voters preoccupied by economic jitters.

But 50,000 U.S. soldiers will remain in Iraq up to an end-2011 deadline set in a bilateral security pact Bush signed with the Iraqi government just before departing the White House.

Those who say the war in Iraq is ending are committing a mistake said Hassan bin Hachim 62, an Iraqi day labourer.

The war will not end unless a real partnership government is formed that includes all the parties, and doesn't marginalise any of the parties, he said.

A Sunni-backed cross-sectarian coalition led by ex-premier Iyad Allawi won two more seats than Maliki's Shi'ite-led alliance in the 325-seat parliament in March elections, but both fell short of a majority needed to govern. Coalition talks have gone nowhere.

If Allawi's bloc ends up being excluded from government, anger among Iraq's once dominant Sunnis could provide new fuel for the Sunni Islamist insurgency opposed to the rise to power of Iraq's Shi'ite majority after the fall of Saddam.

Muhsin al-Timimi, a 47-year-old journalist, hopes for an end to the war in which more than 100,000 Iraqi civilians, and more than 4,400 U.S. soldiers, have died.

But the war will only end when our politicians agree with each other and form a government. This will lay the ground for a better future. Otherwise the war will continue, Timimi said.

(Additional reporting by Reuters Television; Editing by Michael Christie and Michael Roddy)

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