Iraqi interim Prime Minister Iyad Allawi addressed the country's national assembly Monday, saying that while improvements are being made, Iraq still faces a significant security threat from insurgents and terrorists.

While noting that Iraq is making improvements in such areas as the distribution of electricity and drinking water, the rehabilitation of schools and hospitals, and greater investment in agriculture, Prime Minister Allawi told the national assembly Monday that the ongoing violence has cost Iraq $7 billion.

Mr. Allawi said Iraq is facing three types of terrorism.

"First, there are criminal acts that are committed by professional criminals such as kidnappings and threatening and aggression on workers and the work of the government departments and crimes that aim to put fear in the hearts of the Iraqi people," he said. "Secondly, sabotage - targeting the infrastructure of the police and the National Guard and the multi-national forces under false pretexts that it is being conducted by elements of the old regime that is aiming to obstruct our march. Thirdly, terrorist acts that are being planned for by foreign elements hoping to destabilize our country. It is the al-Zarqawi group and bin Laden and others, that are working to benefit from these opportunities to harm the Iraqi people."

Speaking two days after five churches in Baghdad were attacked with bombs, Mr. Allawi pledged that Iraqi and multi-national forces will defeat the terrorists.

He also reported that Iraq has graduated new army battalions that will be responsible for protecting the country's borders, while the National Guard and police will control Iraqi streets.

The interim prime minister said he didn't know when multi-national forces would be able to leave the country, citing continuing security threats.

In an effort to get weapons off the streets, Mr. Allawi said he is extending the deadline across Iraq for handing over medium and heavy weapons one last time. The deadline had already been extended from Friday to Monday. He did not specify the new deadline.

While saying the interim government wanted to build a society based on tolerance, Mr. Allawi also said national unity cannot be achieved without punishing criminals, including members of the former regime. He said there must be justice for the victims of violence.