Adm Fallon became head of US Central Command in March 2007

Admiral Fallon

He cited the "embarrassing situation and public perception of differences between my views and administration policy" as the reason for retiring.

An article by Esquire magazine said he was opposed to the use of force against Iran over its nuclear activities.

Adm Fallon said he did not believe there were differences over policy objectives.

The 63-year-old admiral became head of the US Central Command - which covers an area from the Horn of Africa into central Asia and includes responsibility for US operations in Iraq and Afghanistan - a year ago.

'No policy differences'

US Defence Secretary Robert Gates said the decision to take early retirement was entirely Adm Fallon's, adding that he agreed it was the right thing to do.

"I have approved Admiral Fallon's request to retire with reluctance and regret," he told reporters at the Pentagon.

He said the admiral would be sorely missed.

I don't believe there have ever been any differences about the objectives of our policy in the Central Command

Adm William Fallon

Demise of an outspoken man Profile: William Fallon

President George W Bush said Adm Fallon deserved "considerable credit for progress that has been made... in Iraq and Afghanistan".

The Esquire article suggested Adm Fallon was standing up to a president supposedly contemplating war with Iran.

He is described in the article as "the strongest man standing between the Bush Administration and a war with Iran".

Mr Gates said the idea, suggested in the article, that Adm Fallon's departure indicated that the US was planning to go to war with Iran was "ridiculous".

He said "there is a misperception" that the admiral disagreed with the Bush administration's policies towards Iran. "I don't think there were differences at all," Mr Gates said.

A statement released by Adm Fallon through Central Command's Florida headquarters seemed to reflect those sentiments.

"I don't believe there have ever been any differences about the objectives of our policy in the Central Command," he said.

"The simple perception that there is makes it difficult for me to effectively serve America's interests there."

'No war'

But Adm Fallon's resignation is richly suggestive of discord at the top between the military and the White House, says the BBC's Adam Brookes in Washington.

Adm Fallon oversaw US operations in Iraq and Afghanistan

Adm Fallon's comments, such as those to al Jazeera TV last year that "I expect there will be no war", incurred the wrath of the Bush administration, says our correspondent.

Correspondents say the resignation comes at a time when the US administration seems to be struggling on a number of fronts to maintain the international pressure on Iran, not least with the recent US National Intelligence Estimate that suggested Iran had had a nuclear weapons programme but halted it in 2003.

The Bush administration's official policy towards Iran is to use diplomatic and economic pressures to resolve differences while retaining the possibility of military options.

The US and other Western nations suspect Iran is using its nuclear programme to develop atomic weapons - a charge Tehran denies.