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Republicans in the US Senate have blocked a Democratic proposal to tie a $50bn (£24bn) Iraq war funding bill to a timetable for troop withdrawal.
The 53-45 vote was not enough to advance the bill, which passed in the House of Representatives on Wednesday.
Defence Secretary Robert Gates warned that if the money was not approved, funds would run out by February.
White House spokesman Tony Fratto said that the Pentagon would have to start using its annual budget to cover costs.