WASHINGTON, July 4 (Reuters) - President Barack Obama said on Saturday Iraq faced difficult days ahead after taking control of its towns and cities from U.S. forces but he pledged to remain a strong partner on behalf of the country's security and prosperity.

Speaking at a U.S. Independence Day celebration at the White House just days after U.S. troops withdrew from Iraq's towns and cities into rural bases, Obama said Iraq's future was now up to its own citizens.

"Because of your brave efforts American troops this week transferred control of Iraqi cities and towns ... to Iraqi security forces," Obama said in remarks to military families, with nearly two dozen service members standing behind him.

"Because of the courage and capability and commitment of every American who has served in Iraq, a sovereign and united Iraq is taking control of its own destiny."

"Iraq's future now rests in the hands of its own people," he added. "This transition won't be without problems. We know that there will be difficult days ahead. That is why we will remain a strong partner to the Iraqi people on behalf of their security and prosperity."

Obama received a boisterous response from the crowd.

U.S. combat troops pulled out of Iraq's towns and cities on Tuesday into rural bases, the first step of a bilateral security pact that requires all U.S. troops to leave Iraq by 2012.

A small number of troops stayed behind as advisers and trainers.

Iraqis, keen to have sovereignty after years of foreign military occupation, were at the same time concerned about attacks from militants.