Iraqi Prime Minister Nouri al-Maliki has agreed to peacefully step down and endorse the deputy nominated to replace him, ending a political stalemate that threatened to overwhelm the country's fragile central government.

Al-Maliki's decision clears the way for deputy prime minister Haider al-Abadi, who was nominated for the top post earlier this week, to form a unity government that Iraqi and American officials hope could calm the sectarian strife that has gripped Iraq in recent weeks.

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It's also a foreign policy win for the White House, which vocally endorsed al-Abadi's candidacy as the best chance for Iraq to move forward.

"Today, Iraqis took another major step forward in uniting their country," national security adviser Susan Rice said in a statement. "We commend Prime Minister Maliki for his decision to support Prime Minister-designate Haider al-Abadi in his efforts to form a new government in line with the Iraqi constitution."

Rice said the U.S. was encouraged both by Maliki's decision and signals of support from other sectarian leaders in the country for Abadi.

"These are encouraging developments that we hope can set Iraq on a new path and unite its people against the threat presented by the Islamic State of Iraq and the Levant [ISIL or ISIS]," Rice said.

Secretary of State John Kerry echoed the White House’s commendation, praising Maliki’s decision as “honorable” in a statement. And Senate Foreign Relations Committee Chairman Bob Menendez (D-N.J.) said the “non-violent transfer of leadership is a critical for Iraq’s democratic transition, and is a vital step toward addressing the security crisis in Iraq.”

But the New Jersey Democrat also issued a warning to Abadi on future U.S. military aid.

“My support for U.S. assistance to Iraq will be determined by the decisions and policies of the new Iraqi government to pursue a non-sectarian, inclusive agenda,” Menendez said.

Earlier Thursday before al-Maliki's decision, President Obama implored Iraqis to seize "the enormous opportunity of forming a new inclusive government" under al-Abadi.

Obama said the prime minister-designate had spoken about the need for "a government that speaks to all the people of Iraq" in a phone conversation earlier this week.

"He still has a challenging task in putting a government together, but we are modestly hopeful that the Iraqi government situation is moving in the right direction," Obama said.

Shiite lawmakers briefed reporters from the Associated Press and Agence France-Presse on al-Maliki's decision to step aside.

Al-Maliki had been desperately looking to rally support for a third term, threatening to launch a legal challenge against al-Abadi's nomination. But support for al-Maliki was dwindling both domestically and internationally.

Administration officials have criticized al-Maliki’s governance, saying his purge of Sunnis from top military and political posts allowed for the rise of the extremist terror group that has seized large swaths of northern Iraq.

The White House is hopeful that al-Abadi will be able to sooth tensions with the Sunnis and the largely autonomous Kurdish region, and unite efforts against ISIS.

President Obama and other officials have indicated the U.S. would be willing to step up its military assistance if Iraqi leaders could make progress toward a unity government.

Earlier Thursday, the president said a humanitarian mission in Kurdish territory had been executed "almost flawlessly," and the U.S. would continue to conduct air strikes against ISIS.

"We will continue air strikes to protect our people and facilities in Iraq," Obama said. "We have increased the delivery of military assistance to Iraqi and Kurdish forces fighting [ISIS] on the front lines."

The president also said the military would consider other humanitarian operations similar to the mission at Mount Sinjar if they could do so "without committing combat troops on the ground."

This story was updated at 8:00 p.m.