'We view this agreement as a positive step towards resolving the current crisis,' Rice said in a statement.

Rice later told reporters that she spoke with Lebanese Prime Minister Fouad Seniora.

'We are pleased the people of Lebanon can now get on with their lives,' she said during a press conference with British Foreign Secretary David Miliband.

After days of negotiations under the guidance of the Qatari government in Doha, Lebanese factions wrapped up an agreement that includes election by Parliament of a new president within days.

Lebanon has been without a head of state since pro-Syrian president Emile Lahoud left office when his term expired in November, producing a political stalemate over his successor.

Under the agreement, a new president will be elected by Parliament, a new cabinet will be named, and the rival factions promised to revise Lebanon's electoral laws to help prevent future deadlocks.

The Lebanese Parliament was unable to elect a new president amid disagreements over powersharing in the cabinet between the majority and the Hezbollah-led opposition.

The agreement calls for 16 cabinet posts for the majority and 11 for the minority, giving the militant Shiite Muslim movement Hezbollah the veto authority it had originally sought. Another three posts will be appointed by the new president.

The outcome was seen as a victory for Hezbollah, whose gunmen took to the streets earlier this month after the government banned a telecommunications network operated by the Shiite militants. Fighting between Hezbollah and rival factions left dozens dead and prompted fears of a full blown civil war.

The United States blamed the feud on Hezbollah, which has Iranian and Syrian backing, and lists Hezbollah as a terrorist organization. Syria praised Wednesday's agreement.

US Assistant Secretary of State David Welch cautioned against drawing conclusions that the deal was a victory for Hezbollah, saying that the militia's violent uprising that cut off sections of Beirut did not go over well with the Lebanese people.

'The reaction to it has been extremely negative from most Lebanese and certainly throughout the region,' Welch said.

Meanwhile, US President George W Bush met with Lebanese Maronite Patriarch Nasrallah Sfeir Wednesday at the White House. They did not address reporters.