"Today, Iraq took a promising step forward in this critical effort... Today President Masum named a new Prime Minister designate Dr Haider al-Abadi.

"Under the Iraqi constitution, this is an important step towards forming a new government that can unite Iraq's different communities," Obama said on Monday.

Obama, who is vacationing at Martha's Vineyard in Massachusetts, took a break and called Abidi over phone and urged him to form a new all inclusive cabinet as quickly as possible.

"I pledged our support to him, as well as to President Masum and Speaker Jabouri, as they work together to form this government.

"Meanwhile, I urge all Iraqi political leaders to work peacefully through the political process in the days ahead," he said.

This new Iraqi leadership has a difficult task, he said, adding that it has to regain the confidence of its citizens by governing inclusively and by taking steps to demonstrate its resolve.

United States stands ready to support a government that addresses the needs and grievances of all Iraqi people. We are also ready to work with other countries in the region to deal with the humanitarian crisis and counter-terrorism challenge in Iraq.

"Mobilising that support will be easier once this new government is in place," t US President said.

Obama said over the past few days, American forces have successfully conducted targeted air-strikes to prevent terrorist forces from advancing on the city of Erbil, and to protect American civilians there.

"Kurdish forces on the ground continue to defend their city, and we've stepped up military advice and assistance to Iraqi and Kurdish forces as they wage the fight against ISIL," he said.

Besides the limited air-strikes against ISIL targets, US is providing assistance to people from the minority Yezidi community stranded on Mount Sinjar.

"Some have begun to escape their perch on that mountain, and we're working with international partners to develop options to bring them to safety," he added.

Because of this operation, US objectives in Iraq has stretched further.

"This advances the limited military objectives we've outlined in Iraq: protecting American citizens, providing advice and assistance to Iraqi forces as they battle these terrorists, and joining with international partners to provide humanitarian aid," he said.

"But as I said when I authorised these operations, there is no American military solution to the larger crisis in Iraq. The only lasting solution is for Iraqis to come together and form an inclusive government," Obama added.

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