Petraeus' Iraq report likely to show mixed picture

WASHINGTON, Aug 16 (Reuters) A September report on the US troop build-up in Iraq is expected to show a mixed picture of military progress but shortcomings on political reconciliation, triggering a new debate over whether a pullout is warranted.

The report due by September 15 from the commanding US general in Iraq, David Petraeus, is widely anticipated as a make-or-break assessment of the impact of President George W Bush's decision early this year to send thousands more troops into Baghdad and Anbar province to try to bring stability.

With the unpopular war an issue on the US presidential campaign trail and civilian deaths mounting in Iraq, Democrats are likely to use the report as ammunition for their argument it is time to set the United States on a path to reduce its presence in Iraq.

''It's expected to highlight the fact that the situation in Iraq has not improved and that we need a change in strategy,'' said Jim Manley, spokesman for Senate Majority Leader Harry Reid, a Nevada Democrat.

Some Republicans nervous about the November 2008 election are likely to raise some hard questions about how long the strategy can be maintained given public disapproval of the war.

Senior administration officials familiar with the early work on the report said Petraeus and the US ambassador to Iraq, Ryan Crocker, will describe a mixed picture in Iraq.

There has been more success than expected on the US military's strategy of clearing Baghdad neighborhoods of insurgents and holding them, they said. And perennially restive Anbar province has calmed down as well, they added.

But less progress has made in coaxing political reconciliation from the government of Prime Minister Nuri al-Maliki. What is more, an oil-revenue sharing law and other key benchmarks remain elusive.

''The good news in Iraq is -- military -- we're winning. The bad is the Maliki government is not functioning effectively,'' said Arizona Republican Sen John McCain, a presidential candidate. ''It's some bad news but it doesn't destroy what is happening on the ground.'' SMALLER PRESENCE IN A YEAR Petraeus told reporters in Iraq on Wednesday he was preparing recommendations on troop levels with an eye toward having a smaller presence in Iraq in a year or so.

In Washington, battle lines are already being drawn.

Vice President Dick Cheney said earlier this month that it is still tough going in Iraq but that ''tremendous changes have taken place.'' ''And this is no time to lose heart and make a precipitous withdrawal from Iraq, as some in Congress are demanding,'' he said.

Reid said on Tuesday that during six months of Bush's new strategy, 565 Americans have been killed in Iraq while taxpayers have spent 60 billion dollars.

''After the administration's September 15 report, we hope the president and congressional Republicans will finally work with us to provide a real, overdue change of course in Iraq,'' he said.

Democratic presidential candidates are calling for an end to the conflict.

Former Rep Lee Hamilton, who co-chaired a commission that offered recommendations on how to proceed in Iraq, said in an interview he expected Petraeus to recommend the troop build-up continue into next spring.

He said administration claims of progress have been tempered by a suicide bomb attack in Kahtaniya in northwestern Iraq on Wednesday that killed hundreds of people.

''It's pretty hard to accept the idea of progress if you're killing 250 people with one blast,'' he said.

But he said Democrats do not have the votes to force Bush to change strategy.

''You've got a lot of stirring, and a lot of unease among the legislators could break out, but at the end of the day, the president is in a very commanding position,'' said Hamilton.

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