"There is a significant decrease of around 100 troops in the fifth contingent in Iraq," Defense Minister Nikolai Svinarov told reporters.

Bulgaria is the latest ally in the U.S.-led "Coalition of the Willing" that occupies Iraq to announce it was preparing to pull out. Italy, Ukraine and Poland also signaled they were eager to scale down their presence.

Svinarov said the government, led by former king Simeon Saxe-Coburg, would decide by the end of the month whether to withdraw all troops by the end of 2005.

"There is no decision yet, but we have prepared a report," he told reporters. "It is normal (to think) that if there is a presence in Iraq in 2006, it should be different from a military one."

Eight Bulgarians were killed In Iraq since the start of the war and last week's shooting of a junior sergeant by U.S. forces triggered calls from opposition parties for the country to set a timetable to pull out.

This week, leftist President Georgi Parvanov told the government it should withdraw troops by the end of the year.

Bulgarian army Chief of Staff Nikola Kolev confirmed the military commanders were now awaiting a political decision on the withdrawal.

"The most suitable timetable is for the fifth battalion to be reduced ... and to gradually prepare for a withdrawal," Kolev told BNR radio. Parliament has the final say on troop deployments abroad.

More than 70 percent of Bulgaria's eight million people disagree with the war and the opposition Socialists have promised to pull out if they win general elections expected on June 25.