BAGHDAD (Reuters) - Dogs sniffed for explosives, mobile phones were impounded and U.S. officials bombarded reporters with contradictory orders and scant information just moments before Iraq (news - web sites) formally regained sovereign powers.

Journalists had been hastily summoned for what was billed as U.S. administrator Paul Bremer's last news conference before a handover not due until Wednesday, but the confusion and tight security suggested that something extraordinary was afoot.

Two days early, Bremer was to dissolve the U.S.-led Coalition Provisional Authority (CPA), end more than 14 months of U.S.-British occupation and turn over control to an Iraqi interim government led by Prime Minister Iyad Allawi.

An explosion echoed over Baghdad about 90 minutes before the ceremony in the heavily fortified Green Zone compound, which contains CPA headquarters and some Iraqi government offices.

There in a small room sat Allawi, Interim President Ghazi al-Yawar, Deputy Prime Minister Barham Salih and Iraq's top judge, Medhat al-Mahmoud, sipping tea or coffee with Bremer and his deputy, British special representative David Richmond.

On a table between Bremer and Allawi, both in dark suits, stood the Iraqi flag, inscribed 'Allahu Akbar' (God is Greatest) in Saddam Hussein (news - web sites)'s handwriting, along with a vase of flowers.

"This is a historic day, a happy day, a day that all Iraqis have been looking forward to," said Yawar, wearing traditional Arab robes, in the first of several brief speeches.

Allawi said his government now felt "in control of the situation, in control of the security situation."

"EX-ADMINISTRATOR"

Bremer, apologizing for his lack of Arabic, read a short letter noting the demise of the coalition authority he headed for 13 months, the end of occupation and the assumption of "full sovereign authority" by Allawi's government.

"We welcome Iraq's steps to take its rightful place with sovereignty and honor among the free nations of the world. Sincerely, L. Paul Bremer, ex-administrator of the Coalition Provisional Authority," he concluded, to laughter and applause.

Smiling officials rose to their feet as Bremer handed the letter to Mahmoud, the judge, who then handed it to Yawar.

U.S. media officials had dropped some obscurely worded hints that the transfer of power might take place before June 30 -- "Game day will be in the next few," said one email Sunday.

But the timing was known only to half a dozen senior coalition officials the night before, a senior official said.

Bremer said Allawi had asked for the transfer of power to be brought forward because Iraqis were ready to take control. But surprising anti-U.S. insurgents who have staged a bloody campaign of bombings, assassinations and other attacks before the handover was also a motive in the change of plan...