Bush cites Iraq progress, says troop cuts possible

SYDNEY, Sep 5 (Reuters) US President George W Bush said today he saw signs of progress in Iraq on both the military and political fronts and again held out the possibility of a reduction in US troop levels.

Bush told a Sydney news conference he had been told by his top commanders in Iraq ''that if conditions still improve, security conditions still improve the way they have been improving ... we may be able to provide the same security with fewer troops''.

But the president said no final decision had been made on troop levels and he would not follow ''artificial timetables'' to gauge whether it was time to make reductions.

''I'm not interested in artificial timetables, or dates of withdrawal. I'm interested in achieving an objective,'' Bush told the news conference, given jointly with Australian Prime Minister John Howard ahead of the Asia-Pacific leaders' summit.

Bush arrived in Sydney yesterday night, after a surprise trip to Iraq that comes a week before the top US general in Iraq, David Petraeus, and US ambassador to Iraq, Ryan Crocker, are to testify to the US Congress on conditions there.

He said the Petraeus-Crocker recommendations would be key to helping him formulate his strategy, but stopped short of saying whether a report he would submit to Congress after their testimony would contain further specifics on troop levels.

Bush saw achievements in bringing down the levels of violence and on reconciling Iraq's warring factions, a view much more upbeat than that of a US Congressional report yesterday that found still-high levels of violence and little progress on the political front.

''Reconciliation is taking place and it's important, in my judgment, for the security of America and for the security of Australia that we hang in there with the Iraqis and help them,'' Bush said.

GOALS MISSED A report from an investigative agency of the US Congress said yesterday Iraq had failed to meet 11 of 18 political and military goals set by Congress last May. Among the political goals it has failed to meet is the passage of a law on the sharing of oil revenues among the country's regions.

Bush said he would like to see the government of Prime Minister Nuri al-Maliki pass an oil law but credited it with taking other steps, such as setting a budgeting process.

''In other words, there is a functioning government,'' he said.

At the news conference, Howard, a staunch ally of the US president, gave a strong pledge of support for the Iraq mission, despite the unpopularity in Australia of the war.

''Our commitment to Iraq remains and Australian forces will remain at their present levels in Iraq, not based on any calendar but based on conditions on the ground,'' Howard declared.

''Until we are satisfied that a further contribution to ensuring that the Iraqis can look after themselves cannot usefully be made by the Australian forces they will not be reduced or withdrawn.'' With elections in Australia due by the end of the year, Howard is lagging in the polls behind Labor opposition leader, Kevin Rudd, who has vowed to withdraw troops from Iraq.

Bush plans to meet Rudd tomorrow. He said at the news conference that the US-Australian relationship would remain strong regardless of whether there was a change in leadership.

However, Bush, who has called Howard ''a man of steel'', also advised against ''counting out'' the current prime minister before the elections have taken place.

Underscoring the antiwar sentiment in Australia, the APEC meetings have drawn protesters, many of whom are venting anger about Iraq.

Australia has about 1,500 troops in and around Iraq, about 550 of which are combat troops.

REUTERS LPB PM1610