Jewish groups have welcomed a deal between the American and Iraqi governments, which will allow the Iraqi Jewish Archive to remain in the United States for an unspecified period.

Before the deal was announced on Wednesday, Jewish groups had protested against the planned return of the archive – which contains a collection of sermons from the 17th-century, a 1902 Haggadah, a 400-year-old Bible, 2,700 Jewish books, documents and Torah scrolls that belonged to members of the Iraqi Jewish community.

The so-called archive was discovered by United States officials after raiding Saddam Hussain’s intelligence bureau in May 2003.

The archive, which the US spent £1.7m restoring, was showcased at the Museum of Jewish Heritage in New York this week.

Lukman Faily, Iraq’s ambassador in the US, said: "I am pleased to announce that, in order to continue this important work and to allow the exhibit to be displayed in other cities in the United States, the government of Iraq has authorised me to extend the period which the exhibit may remain in the US.

"We consider the history of Jewish communities in Iraq to be an integral part of the history of our country — one that we honor and cherish — and nothing can erase this history, nor change our commitment to preserving its memory."

Maurice Shohet, president of the World Organisation of Jews from Iraq (WOJI), who is based in New York, said: “WOJI will now work with all sides concerned to have the IJA Exhibit travel to other American museums, besides Washington, DC and New York, in the coming months, and hopefully to other cities in the west, where there is large Iraqi Jewish communities such as Montreal and London."

But London-based Lyn Julius, co-founder of Harif, a UK group that represents Jews from North Africa and the Middle East, said: “This is a welcome development. However, the agreement only provides for an extension, it does not unequivocally establish the archive’s ownership, nor its final destination.

"We must continue to insist on the principle that this archive does not belong to Iraq, but to the exiled Iraqi-Jewish community from whom it was brutally and unlawfully seized.”

Iraqi-born Edwin Shuker, vice-president of Justice for Jews from Arab Countries, said he was "elated" by the news, but added that "the job of safeguarding the collection is not yet complete".