By Paul Eckert

WASHINGTON, Sept 21 (Reuters) - The United States expects to have taken in about 1,700 refugees from war-torn Iraq by the end of this month and will resettle 1,000 Iraqis a month beginning in mid-October, U.S. officials said on Friday.

After U.S. refugee agencies set up processing centers in Iraq's neighboring countries, the pipeline "is now at full flow and we will be doing a thousand a month every month," said Department of Homeland Security counselor Paul Rozenzweig.

"Next year we're going to resettle 12,000 Iraqis out of a projected total of 70,000 worldwide," he told a news conference. He referred to the U.S. fiscal year, which begins on Oct. 1.

Sectarian fighting and other violence that followed the 2003 U.S. invasion of Iraq have forced more than 4 million people to leave their homes. More than 2 million people are displaced within Iraq and up to 2.2 million more are believed to be in Syria and Jordan, according to U.N. data.

Critics including U.S. politicians and top diplomatic officials have complained that refugees faced waits of up to two years because of bureaucratic bottlenecks and rigorous security measures put in place after the Sept. 11 attacks.

Terry Rusch, admissions director at the State Department's Bureau of Population, Refugees and Migration Affairs said processing of refugees had "accelerated dramatically" in recent months.

As of Thursday, 1,135 Iraqis had been admitted for permanent settlement in the United States, up from 190 at the end of July, she said.

Rusch attributed delays to the work of setting up a system for handling refugees and a decision by Syria to deny entry visas to U.S. interviewers.

The U.N. High Commissioner on Refugees has referred about 10,000 Iraqis and their family members in Jordan, Syria, Egypt, Turkey and Lebanon to the United States for consideration for resettlement.

Of those 10,000 household heads, the Department of Homeland Security has interviewed 4,309, with a target of completing 4,500 by the end of this month, Rozenzweig said.

Of the 4,309 Iraqis interviewed, 753 were rejected on grounds ranging from criminal backgrounds, false documents or identity claims and other security concerns, he said.

"We also want to ensure while processing refugees who deserving of our compassion, we don't take any steps at all that would needlessly create security risks," said Rozenzweig.

He declined to comment on whether suspected Islamic militants had tried to gain admission to the United States under the guise of being a refugee.

In a category separate from refugees, 500 Iraqis who face particular risk for having served in jobs such as translators for U.S. authorities can settle in the United States with their families each year under a 2006 measure passed by the U.S. Congress.

Of those vulnerable Iraqis 384 had been admitted so far, with 54 more expected by the end of this month, U.S. officials said.

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