At least 26 people were killed Tuesday in the northern Iraqi city of Kirkuk, marring a national holiday declared to celebrate the departure of U.S. combat troops from Iraqi cities after six years and three months of war. The government staged a military parade to mark 'National Sovereignty Day,' and Prime Minister Nouri al-Maliki made a triumphant, nationally televised address. 'This day, which we consider a national celebration, is an achievement made by all Iraqis,' said Maliki, speaking before the explosion at a market in Kirkuk, which damaged at least 30 shops. 'Those who think that Iraqis are unable to defend their country are committing a fatal mistake.' While more than 130,000 U.S. troops remain in the country, patrols by heavily armed soldiers in hulking vehicles have largely disappeared from Baghdad, Mosul and Iraq's other urban centers. Pentagon spokesman Bryan Whitman said the United States had closed or returned to local control 120 bases and facilities, and would formally turn over or close another 30 by the end of Tuesday, Reuters reported from Washington. Gen. Ray Odierno, commander of U.S. forces in Iraq, called the date a 'significant milestone,' and said that U.S. forces would no longer conduct unilateral operations anywhere in the country. Iraqis danced in the streets and set off fireworks overnight in impromptu celebrations to celebrate the pullout, a transition that the Iraqi government has said represents the nation's return to full sovereignty. 'Out, America, out!' a group of sweat-drenched young men chanted Monday at a Baghdad park as the sun was setting. They jumped up and down to the deafening beat of drums and the wail of horns. Across town, the virtual absence of American troops and helicopters, the cheerfulness of Iraqis in military uniform, and the cries of joy gave this scarred, bunkered capital a rare carnival-like atmosphere. Iraqi police and army cars were decked with ribbons, balloons, plastic flowers and new flags. A few Baghdadis drove under the sweltering midday sun Monday honking horns as passengers hung out the windows waving flags and yelling euphorically. In Basra, the sentiment was inscribed on walls with spray paint: 'No No Americans.' Another graffiti artist instructed: 'Pull your troops from our Basra, we are its sons and want its sovereignty.' Despite the violence Tuesday -- and the news that four American troops had been killed in combat Monday -- Iraqi and American leaders expressed confidence in Iraqi security forces, which in the days ahead will rely less on U.S. support. Regarding the celebratory atmosphere against the backdrop of continuing violence, Odierno said Iraqis have every reason to be proud. 'It's a celebration of them taking responsibility for security of their own cities,' the general said. The military gave no details about the deaths of the four American troops in Baghdad on Monday. Another soldier was killed Sunday in a separate attack. The ongoing bloodshed, Odierno said, 'reminds me that there are still dangers out there. There are still people out there who do not want the government of Iraq to succeed.' He said a 'small number' of American soldiers -- U.S. officials have declined to provide an exact count -- would remain in Baghdad and other cities as trainers and enablers. But the military's focus is shifting to outlying areas of the capital and the northern city of Mosul, as well as the borders with Iran and Syria. Tuesday's explosion in Kirkuk happened about 6 p.m. at Shorja Market when explosives packed in a vehicle detonated, Iraqi police officials said. Americans are now entering a new phase in this war. As of July 1, they will have to behave as guests in a foreign land. 'There was a time here where we had pretty much carte blanche to do whatever we wanted to do,' Brig. Gen. Stephen R. Lanza, the top U.S. spokesman in Iraq, said recently. Going forward, he added, 'all missions are coordinated with the Iraqi government.' Some American troops have expressed concern about becoming more exposed after the withdrawal, because Iraqis will have unprecedented authority over U.S. military operations. U.S. commanders have said they were bracing for an uptick of attacks from extremist groups during the transition period, which occur almost daily, and will rely heavily on Iraq's security forces for protection in the months ahead. Odierno accused Iran of continuing to train, fund and support groups who carry out attacks in Iraq, often using rockets and armor-piercing roadside bomb attacks. Even as he acknowledged the peril Iraq still holds for American troops, however, Odierno said that in accordance with the withdrawal agreement the U.S. military will no longer conduct combat operations in Iraqi cities. The pullback has created enormous fear and uncertainty among many Iraqis, who believe it will open the door for insurgents to increase their attacks. Apart from the organized celebrations, normally congested streets were empty in many parts of the capital Monday night and Tuesday, as Iraqis appeared to heed warnings of impending attacks by insurgents. But city streets were also largely empty of Humvees and U.S. troops -- and, where people gathered, a celebratory mood prevailed. Banners were strung around Baghdad proclaiming: 'On the day of sovereignty, we're lighting candles for a better future.' Anchors on state-run television wore folded Iraqi flags over their shoulders, and the station kept a graphic of a small Iraqi flag waving under the date '6/30' on the top left corner of the screen. At a celebration in Zawra Park, one of the largest in the country on Monday, revelers sang songs popular during the war between Iraq and Iran in the 1980s. 'To the front lines we go,' they sang. 'Our bullets in our magazines.' Then, spraying water from bottles at the crowd, they began chanting: 'America has left! Baghdad is victorious!' Iraqi policemen, many wearing body-armor vests without plates, bobbed their heads, taken by the moment. 'The Army of the U.S. is out of my country,' said Ibrahim Algurabi, 34, a dual U.S.-Iraqi citizen now living in Arizona who attended a concert of celebration in Baghdad's Zawra Park. 'People are ready for this change. There are a lot of opportunities to rebuild our country, to forget the past and think about the future.' As Americans adapt to the vaguely defined terms of the security agreement that set June 30 as the deadline for soldiers to leave the cities, there is little talk among U.S. commanders and diplomats of engineering a victory in the 21/2 years they expect to remain here. Some officials have begun saying privately that the best-case scenario would be to depart with a 'modicum of dignity.' Doing so will mean contending with a resilient insurgency, volatile politics and a growing assertiveness among Iraqis whose patience with the U.S. presence long ago wore thin. Maliki has called the withdrawal of U.S. troops from the cities a 'great victory.' He has not mentioned the thousands of U.S. lives lost in Iraq, or the billions of American tax dollars spent here. Between now and the August 2010 deadline by which the U.S. combat mission in Iraq is slated to end, U.S. troops will retain a significant, if less visible, presence in Baghdad as well as Mosul, in northern Iraq, and Basra, in the south. U.S. soldiers anticipate that they will have to defer to Iraqi leaders and commanders more often than not in order to conduct business in the cities. With scores of urban outposts shut, a greater percentage of American soldiers are being deployed to the borders and the belts around Baghdad and Mosul, where U.S. commanders hope they will be able to interdict militants and weapons. All troops must withdraw by 2012, the final date of a drawdown timetable that neither Iraqi nor American officials are inclined to change. Special correspondents Zaid Sabah, Dalya Hassan, K.I. Ibrahim and Aziz Alwan in Baghdad and Aahad Ali in Basra contributed to this report. 