By Arshad Mohammed
BAGHDAD (Reuters) - U.S. Secretary of State John Kerry, visiting Baghdad on Friday, urged Iraq not to let its political crisis interfere with the fight against Islamic State and voiced unequivocal support for Iraqi Prime Minister Haider al-Abadi.
Abadi last week unsettled Iraq's political elite with a proposed cabinet reshuffle that aims to curb corruption by replacing long-time politicians with technocrats and academics.
His aim is to free Iraqi ministries from the grip of a political class that has used the system of ethnic and sectarian quotas instituted after the U.S.-led invasion in 2003 to amass wealth and influence.
U.S. officials fear the political unrest may harm Iraq's efforts to retake territory it has lost to Islamic State militants, notably its second city of Mosul, seized when parts of the Iraqi army collapsed in 2014.
Kerry told reporters that decisions about the reshuffle were for the Iraqis to decide but said he had indicated to Abadi that it was important to have political stability in Iraq so that military operations are not affected.
"I want to reiterate the support of President Obama, Vice President Biden, myself as secretary, and the entire administration (in) the United States for Prime Minister Abadi, who has demonstrated critical leadership in the face of enormous security, economic and political challenges," Kerry told reporters at the U.S. Embassy inside Baghdad's fortified Green Zone.
Kerry met earlier with Abadi, who is grappling with an economy battered by low oil prices and strained by the cost of the war against Islamic State which has displaced more than three million people and destroyed towns and cities.
Kerry said the United States was providing an additional $155 million in humanitarian aid to Iraqis displaced by Islamic State.
MOSUL OFFENSIVE ON HOLD
Asked if there had been any discussion about more U.S. troops going to Iraq, Kerry said there had been no formal request from the Iraqis and the issue had not been raised on Friday.
The United States, which withdrew its forces from Iraq in 2011, has redeployed several thousand as part of a coalition it is leading against Islamic State.
In the past two weeks, Iraqi forces backed by U.S.-led coalition air strikes have retaken significant parts of Hit, a town 130 km (80 miles) northwest of Baghdad.
However, an offensive billed as the first phase of a campaign to recapture the northern city of Mosul has been put on hold until reinforcements arrive.
Kerry said Abadi had made clear his commitment to retaking Mosul and that he has a timetable for doing so.
"The fact is, in Iraq, Daesh fighters have not been on the offensive in months," Kerry said, using an Arabic acronym for Islamic State. "They are losing ground, including more than 40 percent of the territory that they once controlled in Iraq."
Baghdad is also hamstrung by the plunge in global oil prices that has shriveled its main source of revenue.
On Thursday, officials from the International Monetary Fund and the government said the oil price forecast in the 2016 budget would be cut to about $32 a barrel from $45, widening Iraq's fiscal deficit by several billion dollars.
Kerry also met Iraqi Foreign Minister Ibrahim al-Jaafari and the head of the Kurdistan Regional Government, Nechirvan Barzani.
(Additional reporting by Maher Chmaytelli and Stephen Kalin; Editing by Janet Lawrence and John Stonestreet)