The remark by Ayatollah Mahmoud Hashemi Shahroudi was the first sign of approval from Iran of the controversial deal that has long been lambasted by Tehran, where extremists within the hardline camp oppose it and many claim it would turn Iraq into a U.S. colony.

The pact got the green light Sunday from the Iraqi government but still has to be approved in the Iraqi parliament later in November.

The Web site of Iran's state television on Monday quoted Shahroudi as saying he hoped the U.S. will withdraw troops from Iraq within the time specified in the deal.

"The Iraqi government has done very well regarding this (security pact)," Shahroudi said. "We hope the outcome of (the deal) will be in favor of Islam and Iraqi sovereignty."

Shahroudi is very close to Iran's top leader Ayatollah Ali Khamenei and his comments reflect thinking of conservatives within the ruling system, but not all hard-liners or President Mahmoud Ahmadinejad.

Iran has in the past bitterly opposed the pact claiming it enshrines the U.S. military presence in Iraq and threatens Iranian security and regional influence. It has contended that American presence is the cause of instability in Iraq and the region, and that Iraqi territory may be used by the U.S. for an attack against neighbors.

But on Monday, Iranian state media toned down their opposition to the pact _ a clear indication of the softening of official Tehran stance.

"It is a deal about withdrawal of U.S. troops from Iraq," state television said in a commentary Monday, calling it "a victory" for Iraqi Prime Minister Nouri al-Maliki's government.

But hard-line outlets, which have said the U.S.-crafted deal would "turn Iraq into a full-fledged colony" and urged Iraqis to oppose it, remained adamant in their opposition.

"Iraqi government gave in to American capitulation," read a front-page headline in the hard-line daily Jomhuri-e-Eslami newspaper Monday.

Kayhan, another hard-line daily, highlighted "judicial immunity (deal) for occupiers" that is part of the deal to highlight its criticism.

The U.S.-Iraqi deal got the Cabinet's backing after months of haggling and only after two changes requested last week by al-Maliki were added in.

But Iranian lawmaker Esmaeil Kowsari said that despite those amendments, the deal "is still unacceptable" and would "be acceptable when American troops are gone."

Kowsari said he expected the Iraqi parliament will not accept a deal that gives judicial immunity to Americans in Iraq or denies the Iraqi customs administration to inspect cargo or any other consignment for Americans in Iraq.

Ali Aghazadeh, another hard-line lawmaker, said the deal provides legitimacy to a continued U.S. occupation of Iraq. "This is a shaky agreement. The U.S. will seek to extend their stay in Iraq," he said.

But political analyst Saeed Leilaz said Iran's verbal opposition to the deal was meant for "domestic and propaganda" purposes while Tehran in reality is happy with the deal. He claimed Iraqi government officials consulted Tehran before approving the pact.

Leilaz said Iran considers the U.S. presence in Iraq a support for Maliki's Shiite government."