The United Nations evacuated staff from Baghdad as Iraqis paid their last respects on Friday to a leading politician whose assassination plunged U.S. efforts to rebuild the country into further turmoil.

The killing of Akila al-Hashemi, who died on Thursday five days after gunmen fired on her car, and the U.N. pullout, following two suicide bomb attacks, were setbacks to a U.S. bid to get more international help to police and rebuild Iraq.

In an effort to forge an international consensus, Secretary of State Colin Powell laid down a deadline of six months for Iraqi leaders working under the American occupation to produce a new constitution -- paving the way for elections.

"Six months seems to be a good timeline to put out there for the creation of a constitution, and also to give a sense of momentum and purpose to the effort of moving toward full restoration of authority over Iraq to the Iraqi people," he said at a news conference at the United Nations.

Washington has resisted pressure from countries such as France and Germany for an early handover of power to Iraqis, saying this would just worsen the chaos plaguing the country.

In the town of Baquba, a hotbed of guerrilla activity northeast of Baghdad, a mortar attack on a market killed eight Iraqis on Thursday evening, the U.S. military said. A spokesman said no U.S. troops were wounded.

More than 15 people were injured and locals said the death toll would have been higher if the attack had happened earlier in the day when the market was busier.

"We don't know who was behind this crime -- maybe people who want to destabilize Iraq or people who were trying to target the Americans," Khaled Youssef said. "But in the end, it was Iraqis who were killed."

80 U.S. DEAD IN ATTACKS

In the northern oil hub of Kirkuk, a rocket-propelled grenade attack on a U.S. Army vehicle killed one soldier and wounded two on Thursday, the military said. The attack brought to 80 the number of U.S. soldiers killed by guerrillas since President Bush declared major combat over on May 1.

Bush is trying to win agreement for a greater U.N. role in Iraq in return for more international help in terms of troops and cash.

But securing funding has been difficult. The European Commission said it would offer 200 million euros ($230 million) to help rebuild Iraq up to the end of next year, a far cry from the $20 billion Washington has pledged to spend.

Promises from other countries to help rebuild Iraq have fallen short of expectations, so far totaling only $2 billion, before a donor conference in Madrid next month, a U.S. congressional source said.

The White House on Friday defended Bush's $87 billion reconstruction proposal for Iraq but did not rule out getting part of the money in the form of loan guarantees.

U.N. PULLOUT

Efforts in New York to agree a wider U.N. mandate are in stark contrast to events on the ground in Baghdad.

The United Nations ordered a further pullout of staff from Iraq on Thursday. A U.N. spokeswoman in Baghdad said about a third of the 42 international staff in the capital would leave over the next few days.

A suicide car bomber blew himself up near the U.N. compound on Monday, also killing a security guard, a month after a truck bomb attack on the building killed 22 people including mission chief Sergio Vieira de Mello.

"There have been two attacks and we cannot go on like this," Veronique Taveau said. "But the U.N. is not pulling out of Iraq. We are committed to the work we are doing here."

She said the evacuation would not affect the day-to-day running of U.N. humanitarian programs.

U.N. sources said Secretary-General Kofi Annan's security aides had advocated a total withdrawal but Powell expressed concern about the impact such a move would have on Iraq. The outcome was a compromise.

"I've worked from Somalia to Rwanda to Bosnia to Timor and I've never seen anything like this," a U.N. security official in Baghdad said. "We've never had anyone actually target us like this before."

Diplomats and prominent Iraqis held a memorial ceremony on Friday for Hashemi, who had been due to be part of the Iraqi delegation to the U.N. General Assembly this week.

Members of her family carried her coffin, draped in an Iraqi flag, into the Governing Council offices, chanting the Islamic declaration of faith.

"Those who thought that the death of Dr Akila would disrupt the march toward the dawn of democracy and freedom will be disappointed," council member Iyad Allawi said.

The body was taken to the holy city of Najaf for burial.

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