The United States is planning to withdraw up to a quarter of its forces from Iraq - possibly next year.
Reports suggest military commanders believe they are making sufficient progress against insurgents and in training Iraqi security forces that the Pentagon has started to plan to reduce US forces from the current 142,000 to as few as 105,000.
Officials have looked at up to 70 separate indicators, including such variables as the number of assassination attempts on Iraqi officials. But the most important indicator is the sharp decline in the number of US troops being killed in action and the reduction in the number of daily attacks from insurgents.
"The KIA [killed in action] numbers have been very good and there is no doubt that the situation has been improving," said John Pike, director of the Washington-based think-tank GlobalSecurity.Org
"One reason for this is that the enemy expended maximum effort against the election last January, in the sense that if you wanted to mount an attack it would be far more effective before the election than afterwards. I think they have worn themselves out, so to speak.
"The question is whether this is simply a lull ... "
Senior commanders say they have been heartened by figures that show a downward trend in the number of insurgent attacks.
In March the number of US troops killed was 36 - the lowest for more than 12 months and a sharp decrease from the 107 killed during January.
At the same time the total of attacks on US forces has fallen to around 40 a day, down from a pre-election high of 140. Insurgents appear to be concentrating more on attacking Iraqi security forces.
General George Casey, the senior US commander in Iraq, recently told CNN that the withdrawal of his troops depended on a number of factors, including the wishes of the recently elected Iraqi Government.
He said that if "all went well we should be able to take some fairly substantial reductions in the size of our forces by next year".
Iraqi President Jalal Talabani talks of a complete withdrawal of foreign troops in two years.
"We are in great need to have American and other allied forces in Iraq until we will be able to rebuild our military forces," he said.
The political bounty for President George W. Bush from a reduction of even a quarter of the US troops based in Iraq would be considerable.
The Pentagon says it has trained and equipped around 70 per cent of the 95,000 Iraqi troops it believes will be required to deal with insurgents and 40 per cent of the required 140,000 Iraqi police.
Iraq: is the tide turning?
Yes
* Attacks on allied forces have dropped to between 30 and 40 a day, from a daily peak of 140 in January.
* After a spate of kidnappings followed by beheadings, only two Westerners are still being held.
* More than 152,000 Iraqis are now trained and equipped for the military or the police commandos.
* Iraqi oil production for the past 9 months has reached 205 million barrels, and exports at 1.5 million barrels a day.
* Electricity is almost back up to pre-war levels, when Iraq was under sanctions.
* Several top aides of rebel leader Abu Musab al-Zarqawi captured or killed in recent weeks.
* Sovereign Government was installed last week.
No
* Civilian Iraqi deaths close to 20,000, and death-rate still rising since the elections.
* Kidnappings of Iraqis are rife.
* Large parts of Iraq still outside United States or Iraqi control. Doubts about quality of Iraqi police.
* Only significant oil production is in southern Iraq. The oil pipelines across northern Iraq are under regular attack and vulnerable to sabotage.
* Power shortages remain frequent.
* Car bombers and suicide bombers continue to target the US military and the Government
* Some 48 per cent of Iraqis are still out of work.
- INDEPENDENT
US tipped to cut 37,000 troops from Iraq
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