The United States said on Thursday it will hand over Saddam Hussein's former official residence to the Iraqi government by December 31 after occupying the majestic sandstone palace since the 2003 invasion. "The United States has now moved into our new embassy and we are preparing to turn the republican palace back to the government of Iraq," embassy spokesman Susan Ziadeh told a foreign news agency. "We had said we would move by the end of the year," she added. The vast palace, at the very heart of the heavily fortified Green Zone where the Iraqi government and some major western countries' embassies are located, was built in the early 50s by the last Iraqi king, Faisal II.