The Bush administration on Tuesday said it is pushing hard for a military agreement with Iraq that will outline how U.S. forces operate in the long-run after a United Nations mandate expires at the end of the year.

Iraqis, too, want the so-called status of forces agreement taken care of quickly, but several sticking points could keep negotiators from their goal of finalizing the document before July.

On the Iraqis' side, their concern is preventing a stance that provokes its militant, Shiite neighbor to the north: Iran. On the Americans' side, officials want to have as much freedom to pursue Al Qaeda and other forces opposed to the Iraqi government — including Iranian-affiliated forces.

"We're confident it can be achieved, and by the end of July deadline," David Satterfield, the State Department's top adviser on Iraq, said of the agreement.

Satterfield also bristled at suggestions that the talks might go on past July, a suggestion forwarded by a senior Bush administration official cited by The Associated Press. That source said it was "very possible" the U.S. may have to extend the existing United Nations mandate.

"It's doable, that's where our focus is, not on alternatives," Satterfield told reporters. "We're focused on plan A because we believe plan A can succeed. ... We think it's an achievable goal."

White House spokesman Gordon Johndroe also dismissed the AP source, calling the assertion "Not accurate. We would like to see and the Iraqis would like to see an agreement. They have repeatedly said they do not want to be under a U.N. mandate for another year. Negotiations continue."

Iran's supreme leader this week brought up the agreement with Iraqi Prime Minister Nouri Al-Maliki, and Iraqi lawmakers lobbied Congress on Capitol Hill last week, expressing their fears that the agreement would set up permanent U.S. bases that could be used to carry out strikes against Mideast foes, including Iran.

Last Friday, a Sunni member of the Iraq Parliament Sheik Khalef al Ulayyan, expressed some of the concerns over the agreement while in Washington.

"The U.S. forces can arrest any Iraqis at any time whenever they want," he said, speaking in Arabic. "And the U.S. will maintain the right to attack any foreign countries, any neighboring countries from inside Iraq.

"When we look at this treaty we don't just think it's a treaty that affirms the occupation of Iraq, it's even worse. It looks like a treaty that will be the annexation of Iraq to the United States."

Shia MP Nadeem al-Jaberi called for total withdrawal of U.S. forces, and suggested the treaty would be meaningless if negotiated under an administration that will "be out of office within the next few months."

In a letter to Congress, more than 30 Iraqi Parliament members, many of whom are allied to anti-American cleric Moqtada al-Sadr and Iran, rejected any agreement that is not "linked to clear mechanisms that obligate the occupying America military forces to fully withdraw from Iraq, in accordance with a declared timetable and without leaving behind any military bases, soldiers or hired fighters."

Click here to see the letter from the Iraqis to Congress.

Now Congress — led by anti-war Democrats — is demanding a say from Defense Secretary Robert Gates and Secretary of State Condoleezza Rice.

Senate Foreign Relations Committee Chairman Joe Biden, D-Del., and three others sent a scathing letter to Gates and Rice threatening to block war funding unless Congress is consulted.

But although the United States has negotiated similar status of forces agreements with 80 other nations, very few have gone to Congress for approval.

U.S. officials believe much of the criticism has been orchestrated by Iran through militant Shiite groups including Hezbollah in Lebanon, and al-Sadr, who is believed to be in Iran. Al-Sadr has called for weekly protests against the deal.

On Monday, Iranian supreme leader Ayatollah Ali Khamenei told al-Maliki, while visiting Tehran, that the presence of American forces was the "main obstacle" blocking Iraq's "progress and prosperity."

He told al-Maliki that Iraqis must "think of a solution to free" the country from American troops rather than seeking a way to extend their stay. Iran also fears that Iraq could be used as a launching pad for attacks on the neighboring country.

U.S. Ambassador to Iraq Ryan Crocker last week sought to assure the Iraqis that Americans are not seeking permanent bases.

"I can tell you that we are not seeking permanent military bases in Iraq. That is just flatly untrue. Nor are we seeking to control Iraqi airspace. That is another kind of enduring myth," he told reporters.

Satterfield also disputed that Tuesday, saying Washington "does not think Iraq should be an arena, a platform for attacks on other states."

"We want to see Iraqi sovereignty strengthened, not weakened," Satterfield said.

He added that "parties outside Iraq" who demand respect for Iraqi sovereignty "should be sure they're respecting Iraq's sovereignty" — a clear reference to U.S. allegations that Iran arms and trains Shiite militants here.

Mindful of the political risks in striking such a deal, Iraq's government plans to ask parliament to ratify the agreement as the representative of the Iraqi people.

Much of the criticism centers around U.S. requests for long-term access to military bases, freedom of movement for American ground troops, authority to detain suspects and immunity for U.S. personnel including private contractors from prosecution in Iraqi courts.

Iraqi lawmakers said the Americans had submitted new proposals to address some of those concerns, but it was unclear if they would be enough to soften Iraqi opposition.

Deputy Prime Minister Bahram Saleh told reporters Tuesday that Iraq wanted to deepen its relationship with the United States "to serve our country, to preserve our independence and sovereignty from internal and external security challenges."

Without mentioning Iran, he said the agreement would not be "in any form a threat to others."

"Iraq also needs assurances from the neighboring countries to protect its sovereignty and stop any interference in its internal affairs," he added.

If the negotiations are not concluded by the end of the year, the U.N. mandate could be extended, although Crocker said: "My focus on this is more on getting it done right than done quick."

And a senior U.S. military official told FOX News that if there is no status of forces agreement, and the U.N. mandate is extended, he would have what he needed militarily to continue operating in Iraq. The official added that the United States would maintain control of forces there, and would not give the Iraqis full veto power carried out by U.S. military.

FOX News' Jennifer Griffin and The Associated Press contributed to this report.