Key challenges remain, including the discontent of former Sunni insurgents recruited by the US and credited with improving security.
Amid a huge display of national pride, some expressed concerns that violence could spike again.
The troops will form 'belts' around volatile cities like Mosul, where some fear gains in stability will be lost when US troops pull out on June 30.
Early returns from Saturday's provincial polls suggest that the Shiite prime minister's Dawa Party will be the big winner.
An emerging backlash against rule by religious parties gives opening to technocrats in Jan. 31 provincial elections.
Moqtada al-Sadr instructed his militiamen to join a new social wing of his anti-American Shiite army.
Counterinsurgency efforts require US soldiers to shift from fighting to peacekeeping, but many feel ill-prepared to conduct investigations and interact with Iraqis.
Most jobs are in the military, police, and intelligence forces. But Iraqis say those jobs are only attained through family ties or bribes.
A Tuesday bomb attack at a municipal council building within a fortified section of Baghdad's Shiite enclave killed at least four Americans and six Iraqis.