By David Bamford BBC correspondent at the United Nations in New York

United Nations Security Council members are taking stock of their positions in the light of the report on Iraq from the UN special representative, Sergio Vieiro de Mello.

Some UN diplomats say that Tuesday may come to be seen as a watershed in the process to rehabilitate Iraq.

After weeks of bad news on the security front - and on slow progress in rehabilitating Iraq - the American and British delegations are breaking into collective smiles.

Sergio Vieiro de Mello's assessment was positive

The news from Northern Iraq was positive, they said, and it was a day when the Security Council members looked for a consensus of n the future of Iraq.

News of the death of Saddam Hussein's two sons filtered through to the ambassadors during their closed-door discussions following Mr de Mello's presentation.

"We've just had a meeting of the permanent five members of the Security Council - the US, UK, France, Russia and China - and it was very positive. Everybody was talking about where we go from here. It was a good day," the British UN Ambassador, Sir Jeremy Greenstock, told the BBC.

The report published by the UN's special representative, Sergio Vieira de Mello, was for many at the UN surprisingly positive about the Iraqi Governing Council, set up by the US-led coalition 10 days ago.

While Mr de Mello conceded it was not democratically chosen, it did represent a broad spectrum of Iraqi political opinion, including Shia, Sunni and Kurdish interests.

"Credibility you do not acquire overnight. I believe this Council is as representative as it can be in the circumstances," Mr de Mello said.

"Elections need months to be prepared so for this transition, this was the best possible formula to give authority to the Iraqis".

But diplomats acknowledged that the key to progress in Iraq remains improving its internal security.