BAGHDAD: A decade after the start of the war in Iraq, the American diplomatic footprint here is shrinking fast.

As recently as a year ago, the immense U.S. Embassy in Baghdad and other sites around the country were staffed by more than 16,000 personnel. Today, that number has fallen to about 10,500, U.S. Ambassador Robert Stephen Beecroft said this week.

By the end of the year, Beecroft said he expects to have just 5,500 employees in Iraq. Most of them will be security personnel and other outside contractors assigned to support the fewer than 1,000 diplomats who remain. More cuts are expected beyond the end of the year.

"That number will continue to go down. . And they'll go down largely on the contracting side," Beecroft said in his residence on the heavily guarded compound on the banks of the Tigris River.

The sprawling, fortress-like U.S. Embassy officially opened in early 2009 at a cost of more than $730 million as the largest American mission in the world. But it has been under pressure to cut costs.

The downsizing in many ways reflects how sharply wartime assumptions about the extent of American influence in Iraq have shifted since construction on the Vatican City-sized compound began in 2005. Sweeping reconstruction and nation-building efforts championed early on are much less of a priority today, even as Iraq's Shiite-led government forges stronger ties with neighboring Shiite powerhouse and U.S. foe Iran.

America still has influence here, with Iraq-based diplomats and officials in Washington in frequent contact with Iraqi political and military leaders. But Washington was unable to win Iraqi guarantees that would have allowed a continued military presence - something that deprived the U.S. of important leverage in Baghdad, former U.S. Secretary of Defense Leon Panetta recently told a government watchdog.

After the American military withdrawal in December 2011, plans for the embassy to take over much of the reconstruction work have also been scaled back.

"We found pretty quickly that we didn't need all the people and we could do what we needed to do with far fewer," Beecroft said.

The sheer scale of the 104-acre embassy compound and its prominent location in Baghdad's heavily fortified Green Zone - near the former headquarters of the post-invasion Coalition Provisional Authority - have long rankled Iraqis.

Many see it as a symbol of continued occupation and undue American influence despite the smaller headcount, which is largely invisible to most Iraqis.

One of the most vocal critics is anti-American Shiite cleric Muqtada al-Sadr. He last year demanded that Iraq open a similarly large embassy in Washington "in order to preserve the dignity of Iraq and to save the U.S. Embassy (in Baghdad) from the fire of weapons that have not yet been laid down."

The U.S. also has consulates in the Iraqi cities of Basra, Irbil and Kirkuk, and operates other sites around the country. Embassy officials won't specify how many remain, though Beecroft said the U.S. plans to continue returning facilities where it operates to the Iraqis.

Among the sites that have been handed over are facilities at the Baghdad Police College after the embassy scrapped an ambitious police training program that Iraqi officials never agreed to. U.S. auditors last summer determined that more than $200 million was wasted on the program.

The auditor, Special Inspector General for Iraq Reconstruction Stuart Bowen, spent years digging into allegations of corruption and waste stemming from the U.S. presence in Iraq.

He said during a visit to Baghdad this week that he believes Ambassador Beecroft "is very much focused and on point in ramping down a mission that is much too large."

But he said cuts ought to go even beyond those already planned. "The mission doesn't require 5,000 people, much less 10,000," Bowen said. "Even if we had a permanent military presence, the U.S. still wouldn't need an embassy of this gargantuan size."

The staff reductions have been under way since last year. In February 2012, Deputy Secretary of State Thomas Nides said the embassy was cutting costs by 10 percent for the current fiscal year. He said at the time that security costs would be the last to be cut, but declined to say how many employees would remain.

Iraqis asked about the downscaling in U.S. Embassy staff said Wednesday it reflects America's shrinking influence in the country.

"This is a sign the Americans have given up their promises to support Iraqis. The U.S. Embassy has failed to play the role of being a fair mediator among Iraqi political blocs," said Ibrahim Hussein, a Sunni engineer from Baghdad's Azamiyah neighborhood.

Hussein Sabeeh, a Shiite shop owner in eastern Baghdad, said he was happy to hear of the reductions because "it is a step toward totally clearing the country from any traces of the U.S. occupation."

Washington is not along in rethinking the extent of its presence in Iraq.

The United Kingdom, America's main ally in the invasion that began March 20, 2003, announced in October it was shutting its consulate in the southern oil hub of Basra - while maintaining an office for diplomats to use when they travel there - and bolstering resources at its embassy in Baghdad.