Tokyo has about 550 troops in southern Iraq. The mission is strictly humanitarian, but the pro-U.S. government has argued the deployment is needed to help stabilize the country.
"We must not give in to terror," Prime Minister Junichiro Koiuzmi (search) said in a nationally televised address. "The Iraqis are trying to build a government with their own hands. We must support this. The Self-Defense Forces are needed for this end."
The extension of the mission, which was to expire next Tuesday, had been widely expected, despite polls that show about half of Japanese citizens oppose the deployment for fear the troops could be drawn into the fighting.
The Cabinet agreed to the plan at an afternoon meeting, a few hours after Koizumi's ruling coalition signed off on it.
Koizumi sent the soldiers to the southern Iraqi city of Samawah in January, launching Japan's largest and most dangerous military mission since World War II.
He insisted Thursday that the area where the troops are based was a non-combat zone and said local residents were grateful for the humanitarian work done by the Japanese forces.
Opposition leaders against the deployment have argued that all of Iraq is at war. A military dispatch to a war zone would violate the law authorizing the mission.
Critics also say the deployment violates the spirit of Japan's pacifist constitution, which prohibits the use of force to settle international disputes.
Concerns about the soldiers' security was underscored when a Japanese tourist visiting Baghdad was taken hostage in October and beheaded when the government refused to bow to insurgent demands to withdraw its troops.
The Japanese base also has been the target of a series of mortar attacks, though no Japanese soldiers have been injured.
To assuage safety concerns, Defense Agency chief Yoshinori Ono visited southern Iraq over the weekend and concluded the area Japanese soldiers were assigned to was secure enough to keep them there.
"I think it is very important for the world that Iraq be reborn as a democratic country," Ono said after Thursday's decision. "It's important for us to continue our cooperation and humanitarian reconstruction efforts."
Senior lawmakers from Koizumi's Liberal Democratic Party and its coalition partner, the New Komeito Party, also surveyed the region this week.
The new mandate will last until Dec. 14, 2005. To appease critics, it specifically mentions that Japanese troops may be pulled out if security deteriorates.