The 25-member council signed the document before an audience of high-ranking Iraqi and American civilian and military officials, including U.S. administrator L. Paul Bremer.
The signing took place only after two delays: once after deadly bombings targeted Shiites, and once after some Shiite leaders objected to certain clauses in the constitution. The council held talks on Saturday and Sunday, ultimately resolving disagreements.
The constitution, one of the most liberal in the Middle East, includes a bill of rights, and allows for freedom of worship and expression. It guarantees all citizens rights, regardless of religion, gender or ethnic background, and sets up a federal state with Arabic and Kurdish as the two official languages. Islam will be one source of legislation, but not the main one.
The interim agreement also establishes an independent judiciary, and protects Iraqis from government excess.
Iraqi officials expressed their satisfaction with the temporary charter, saying the signing marked a momentous occasion for the country.
"The eighth of March represents a turning point in the history of Iraq for regaining sovereignty on the 30th of June," Muhammad Bahr al-Uloum, Shiite Muslim president of the U.S.-appointed Iraqi Governing Council, said.
Hoshyar Zebari, the temporary cabinet's foreign minister, called the constitution a "new beginning" for Iraq.
"It's the beginning of rebuilding the Iraqi state on a new basis, a new tenet -- a state of law, a state of democratic institutions, a state of equality, a state of the bill of rights. I think this framework is essential for rebuilding Iraq," Zebari said.
However, not all Iraqi leaders responded positively to the constitution. Ayatollah Ali al-Sistani, Iraq's most influential Shiite Muslim cleric, said the interim constitution will make it more difficult to create a permanent charter for the country.
"This (law) places obstacles to arriving at a permanent constitution for the country that preserves its unity and the rights of its people, in all their ethnicities and sects," al-Sistani said in a statement.
He argued only an elected body should approve further legislation.
"Any law prepared for the transitional period will not have legitimacy until it is approved by the elected national assembly," the ayatollah's statement said.
Much of Iraq's Shiite population, which comprises 60 percent of the population, holds the 75-year-old al-Sistani in high regard. In the wake of Saddam Hussein's fall from power, the cleric has emerged as one of Iraq's most influential leaders. He has previously voiced objections to U.S.-backed political plans for Iraq, which led to the United States shelving those plans.
Despite such dissent, President Bush praised the Council Monday for signing the constitution, saying it is critical to the creation of an independent government.
"This document is an important step toward the establishment of a sovereign government on June 30. It lays the foundation for democratic elections and for a new constitution," Mr. Bush said in a statement given to reporters.
"While difficult work remains to establish democracy in Iraq, today's signing is a critical step in that direction," the president said.
The temporary constitution will remain in effect until a permanent one is approved; that is expected to take place in late 2005.