General David Petraeus, commander of US forces in Iraq, has delivered his long-awaited report to Congress in Washington.
General Petraeus has said that the US is meeting its military objectives in Iraq.
He said it should be possible to reduce the 168,000-strong US force in Iraq to pre-surge levels by next summer, without jeopardising the security gains that they have fought to achieve.
He recommended reducing US forces in Iraq by a single combat brigade, or about 4,000, in December followed by a gradual reduction of forces to pre-surge levels by mid-July 2008.
He also warned that a premature withdrawal of US troops from Iraq would be devastating.
General Petraeus said that while the level of civil sectarian deaths remained disturbing, overall there had been an 80% drop in the number of these deaths since December last.
The report assessed the 'troop surge' plan, which saw an extra 30,000 US soldiers deployed to Iraq earlier this year.
US Ambassador Ryan Crocker said US objectives in Iraq are achievable and its people capable of living in peace.
Earlier, US President George W Bush spoke with the Iraqi Prime Minister Nuri al-Maliki via videoconference and urged him to make political progress.
This afternoon Mr Maliki told parliament in Baghdad that security gains had been made across the country.
However, he said his forces needed more time to take over full security responsibility from US-led foreign soldiers.
Some opposition Democratic legislators in the US have called for him to be replaced.
