SEC. GATES: A few opening comments and then we'll take some questions.

This is my fourth trip as secretary of Defense to Iraq. I find the visits extremely helpful, as they give me an opportunity to meet with commanders on the ground and the ambassador, to hear firsthand their views of progress and challenges.

I met with General Petraeus and his staff this morning and look forward to meeting with Prime Minister Maliki, the Presidential Council, and the ministers of Interior and Defense this afternoon.

I also had the opportunity to visit a joint security station this morning, manned by Iraqi police, Iraqi military and U.S. forces. These joint security stations are integral to the strategy of securing the population and ensuring the delivery of essential services. By maintaining a continuing presence in Baghdad neighborhoods, residents there are more secure and more willing to help break the cycle of violence.

I had the opportunity to meet with some of our troops while I was at the joint security station, and as you well know, they're doing a superb job under difficult conditions. They deserve our deepest gratitude for their sacrifices and those of their families. They serve proudly, and they are making a difference.

I also want to recognize the two individuals beside me today. Ambassador Crocker is leading our efforts in working with the Iraqi government to advance political and economic progress, which is essential to reconciliation. And I want to recognize General Petraeus, whose leadership of the Multinational Forces is bringing energy, experience and insight to the mission here in Iraq.

These two are among America's finest public servants, and the American people can count on them to provide honest, candid and realistic appraisals of what's going on here in Iraq, both good and bad.

Let's take your questions. Lolita.

Q Mr. Secretary, as you met with the military leaders this morning, can you tell us what their assessment is of the military buildup and the security situation at this point?

And General Petraeus, can you also address that question of where you think security is? And are you where you felt you needed to be at this point in time?

SEC. GATES: Well, I think General Petraeus can probably give you a more accurate description of the security situation than I can. I would just say that he reminded me that the full surge actually only began a few days ago. We began the process of building up our forces some months ago, but the fifth brigade as part of the surge really only entered the fight within the last few days. And so I can say -- while I indicated yesterday that I think we'll see some trends and be able to point in some directions by September, the full impact of the surge is really just beginning to be felt.

General?

GEN. PETRAEUS: Well, I think the secretary has it right. In fact, literally in the last 24 hours we have launched a number of different offensive operations, in the Baghdad belts in particular, and we're continuing a number of operations that have been ongoing in Baghdad itself.

In general, we're ahead in some areas and behind in some others. The success in Anbar is certainly not something that I envisioned when I came back, but on the other hand, we have more work to do in Diyala province than I felt we would have at this point. And the same goes, really, in Baghdad neighborhoods themselves, although we have been heartened over the last couple of weeks to see the reversal of the trend that we saw in May, when sectarian murders and deaths, something we track pretty carefully, went back up in the month of May to about half of what it was in January, after having been down to one-third of where it was in January. And that is trending back down again, for the first two weeks of this month, anyway.

I might note, by the way -- I don't think it's been announced yet, but last night, several of our Special Operations Forces and Iraqi forces detained an individual named Al Hilfi, who is the head of the secret cells of the extremist elements associated within the Jaish al-Mahdi. He is an individual who was involved in some of the kidnappings, the operations against our soldiers in Karbala and others of the Ajur al Dulaimi gang, if you will, at various times. I'm sorry. Excuse me. Let me back up. We've got Abu Tiba, who was associated with the Ajur al Dulaimi gang. Al Hilfi is the head of the secret cells in the Jaish al-Mahdi for all of Baghdad, so that's a very significant capture that was made last night by our forces in conjunction with some Iraqi forces, and then the other individual, Abu Tiba, who, as I mentioned, was a member of this gang that also may be associated with some of the British citizens who were kidnapped recently.

Q So you got both?

GEN. PETRAEUS: What's that?

Q You got both?

GEN. PETRAEUS: We got both of those last night -- Al Hilfi, the head of the secret cells in Baghdad, and Abu Tiba, who was a member of this Ajur al Dulaimi gang. In the past, you'll remember, we killed Ajur al Dulaimi several weeks ago.

Q In connection with -- September is a month that people back home are anticipating and -- of General Petraeus's report on the situation on the ground and the effectiveness, I guess, of the Maliki government. On both scores, can you kind of tell us what you are hoping for, and -- especially with the Iraqi government? They have a large number of benchmarks to meet; if they don't, what can you say and what can you do?

SEC. GATES: Well, let me address -- make a few comments, and then invite both the ambassador and General Petraeus to comment.

I think that there are 18 benchmarks in the legislation, and it remains to be seen how much progress will be made against those over the course of the next two months or so, three months. As I said last night, I think that it's important also to be aware of what's happening at the provincial and local level.

That's not to say we shouldn't continue our efforts to help strengthen the Iraqi government and the ministries and their ability to deliver services to the country as a whole, but I think we also pay attention to this ground-up effort which has been so productive in Al Anbar province. And so I think you really end up needing to focus on both -- the benchmarks to a considerable extent, focused primarily on the national level, and we certainly have to pay attention to those because they're in the legislation. But as I say, there is this other aspect to it.

In terms of the security situation, as I say, we've got two-and-a-half, three months to go. There are some positive trends, there are some negative trends. I'd characterize the picture as mixed. I think that's an accurate statement of where we are right now.

AMB. CROCKER: Thank you, Mr. Secretary.

With respect to governmental performance, obviously we do have the benchmarks. We are pressing hard on those. The Iraqi government is pushing itself. Progress has been frustratingly slow. We will see where we are by September. We'll report at that time, honestly, as to what's been achieved and what hasn't. And at the same time, I think it's important to remember that while benchmarks are important, that they're a means to an end, and the end is a government that is effective in delivering services to its citizens and an effective instrument at furthering a process of reconciliation. So I think we also have to look on a wider scale than just the benchmarks themselves.

I'd just give you one example over this last week, which is the reactions to the Samarra mosque bombings in which the prime minister stepped up to this as a leader immediately imposing a curfew, ordering additional protections for Sunni holy places, convening the presidency council that brought together the, you know, president and the two vice presidents. We had the Sunni, Shi'a and Kurdish leadership taking collective positions in how to deal with the crisis, and then the prime minister's trip up to Samarra to demonstrate his direct involvement in dealing with the aftermath. I think these are all important indications, and - touch wood - because there's still things to run here obviously, but the fact that we have not seen the kinds of violent reactions develop yet like we did in February of 2006 is worth noting.

So I think it's working on all of these things together -- legislative benchmarks, the larger process of reconciliation -- and then at different levels, as the secretary noted, down to the local and provincial.

GEN. PETRAEUS: Let me just build a little bit on what the ambassador said about the response to the Samarra minaret bombings, because in fact it was quite decisive, it was leadership from the prime minister and the minister of interior, minister of defense going to Samarra to see for themselves, to talk to the security force leaders on the ground, rapid movement of Iraqi police and army forces to Samarra to provide additional protection, also to surge the forces to protect threatened locations in Baghdad and other areas.

Now, there have indeed been several attacks on Sunni mosques. We're aware of only one or two that would be characterized as serious. That is in contrast to really the outbreak of violence that followed in the wake of the bombing in February of last year, which was really extraordinary. We went back and looked, in fact, at our records of what took place in the 24-hour, 48-hour, 96-hour period, and it's a very, very marked contrast.

Again, touch wood, the situation is still very tense and very sensitive, but it appears that this united leadership of all Iraqis from all political parties, ethno-sectarian groups and religious leaders together has, in fact, helped to bring about restraint. Again, touch wood so far.

With respect to the security effort over the next several months, as I mentioned, again, the surge has really just truly begun. We just got the 5th Army surge brigade on the ground, the Marine Expeditionary Unit and the combat aviation brigade, three final pieces of the combat forces that were the important elements of the surge. And we have, in fact, as I mentioned, just launched offensive operations in a number of areas around Baghdad, in particular, to go into areas that were sanctuaries in the past of al Qaeda and from which they have launched car bombs and so forth.

He mentioned that we do see the sectarian murders going down. We have also seen car bombs in Baghdad trend down pretty steadily now for about three or four months, and that is something that we hope to continue as well because they obviously are strategic blows and psychological blows as well as physical blows.

We want to build, needless to say, on the progress that has been made in Anbar province and to really continue that in Fallujah and areas north and south of Fallujah. We, as I mentioned, want to make progress in the belt areas, these important areas, some of which have been used as al Qaeda sanctuaries, some of which are contested between the militias and al Qaeda. And we clearly have some work to do in Diyala province, an area to which al Qaeda has been pushed and moved, both, from areas in Anbar, some areas in Baghdad, as well.

There are some neighborhoods in Baghdad in which we want to consolidate and, again, build on progress that has been made, some of those where the locals have all of the sudden decided to oppose al Qaeda in the same way that we saw happen in Anbar province, the same way that we see beginning to happen in Diyala province. And then there are other areas where we still have some significant work to do to ensure that the faultlines do not, once again, produce a spiral of violence that can be so damaging when it kicks off. We saw some of that last month, frankly, in West Rashid and also to a degree in East Rashid, here in Baghdad.

So that's what we want to do in the weeks and months ahead. We will continue the very heavy pressure on al Qaeda throughout the country, as well, with targeted raids as have been conducted. And you've heard the announcements. Almost literally every day or other day we have announced the detention of another -- (off mike) -- leader of some type or other. In fact you will hear some more announcements about that here in the next 24 hours as well because, again, last night there was success on that front also. But we want to continue to follow up on some of these before we announce them.

Q (Off mike) -- specific question to General Petraeus, and then a broader one to the ambassador.

Do you have everything that you need now to carry out the strategy? And then the broader question for the two of you is, I think, there is ample evidence on the ground that the three factions here really don't share a desired end-state. And in fact the Iraqi government does not exactly share America's desired end-state. How do you, government-to-government, diplomatically convince, cajole or force them to the proper end-state?

GEN. PETRAEUS: Let me say, first of all there are still additional forces coming. There are some additional, what we call, enablers coming, additional intel, MPs, engineers, I think. And again, there's a variety of other units that are still moving in, but they are not the major combat elements. Those are all here now.

Beyond that there has never been a military commander in history who wouldn't like to have more of something or other. That characterizes all of us here. The fact is frankly that we have all that our country is going to provide us in terms of combat forces. That is really it right now between this theater and Afghanistan. And our job now frankly along with the job of our Iraqi counterparts, who would also of course like to have more forces and are striving to build them with our help and support, is to do everything that we can with the additional forces that we have, which represent a very considerable addition in terms of combat power to what we have had here before. And that is indeed what is enabling us, again, to go into some of these sanctuaries in which we have not had a sustained presence in the past.

SEC. GATES: I think the way I would answer your question is that I think no country can escape its history, and the reality here is that the Shi'as were a threat for a long time as were the Kurds. Saddam Hussein and most of those in his government were Sunni Ba'athists who did the oppressing and trying to bring these three different groups together, along with a number of the other minorities here in Iraq, is a difficult endeavor. The reality, though, is that there are a significant number of Iraqis from each of the three factions or three elements who are putting their lives on the line to build an Iraq for all of the Iraqi people -- all of those in the government, tens of thousands in the Army and in the police. The Iraqi casualties in this war are now running about twice to three times what ours are, so these are people who are prepared to give up their lives for a different kind of Iraq than has existed in the past.

So is this a difficult process? Yes, because of the history of this country. But what is extraordinary is it's not just Americans who are -- and our coalition partners who are willing to take risks and put their lives on the line, but a significant number of Iraqis as well, and those are the people we're trying to help so that this country can be -- can remain unified and can have a government that represents all of the different elements of Iraq. And that kind of an Iraq is critical for the stability of this region.

AMB. CROCKER: I would just try to come to the last part of your question. These have to be Iraqi decisions, Iraqi compromises if they're really going to take effect (and work ?). We can't come up with solutions as the United States and expect to impose them or impose, you know, timelines and say this -- that you've got to do this for the future of your country. And that's an important thing to remember about the benchmarks. These are Iraqi benchmarks. We didn't dream them up. That's what they set out as their own agenda.

But at the end of the day, the only thing that will work here and will work here is what the Iraqis bring into being themselves. And for the reasons the secretary cited, this will be a difficult, painful process as different communities try to overcome the legacy of 35 years of Saddam's rules -- rule and the last four of an awful lot of sectarian and ethnic violence.

So it's going to be very, very hard, but again, for the reasons the secretary sets out, there are an awful lot of Iraqis in government and in the neighborhoods who think this can be done, that the country can be held together and put on an even path.

I think our role here is to support it, to press when that's necessary, but in particular to understand that this has to be dealt with in Iraqi terms, with attention to an Iraqi reality. And that will take an application of some real strategic visions in our work.

SEC. GATES: We have time for about one more, I think. Take these two.

Q Mr. Secretary, do you expect the September report by Ambassador Crocker and General Petraeus to lead to a decision on troop levels, or having said that that report will maybe give you trends rather than hard facts, would it be too soon to make decision on troop levels as a result of that report?

SEC. GATES: I actually think it's premature to make that -- to answer that question or to make that judgment. I think we'll have to wait and see where we are in September to see what follows the report of the ambassador and the general.

Q I had a similar question, actually, for General Petraeus. If the surge is really only taking full force now, how can you expect to make sufficient -- aren't you going to need this higher level of forces into next year, also in light of the fact that there really hasn't been a whole lot of progress on the political front?

GEN. PETRAEUS: Well, first of all, again, it's not as if we haven't been doing anything the last several months. As additional forces have arrived, we have obviously put them to work and employed them.

The point that I'm making is that a fairly large coordinated offensive operation with all of these surge forces -- and these last three pieces are very, very important -- has only just now been launched. We have been doing what we might call shaping operations in a lot of these different areas. We've been feeling their edges, if you will, doing intelligence gathering, putting in some special operators, going in but then coming out. And now for the first time we're really going into a couple of the really key areas in the belt from which, again, al Qaeda has sallied forth with car bombs, additional fighters and so forth.

We -- so we think we can build on what has been done -- if you will, the foundation of intelligence and base structure and all the rest that has been put in place over the last several months. We think we can make some progress in that period, in those areas, and we think we can also facilitate some of this bottom-up continued progress in that regard.

It's interesting, the joint security station we visited today that recently had new elections, I guess, for their neighborhood advisory councils in two of the different locales there -- and over time, those will bubble up and then connect with the national structure that works down through the Baghdad province governorate and so forth.

We see some of this kind of feeling already bubbling up in Diyala province, also anti-al Qaeda feeling in Diyala province. We see this in Salahuddin, western Nineveh province and other locations. And we certainly hope to capitalize on that and to make further inroads against al Qaeda in those areas, because, as we have described, we do believe that this is al Qaeda's central front in their particular war of terror, although there certainly are a number of other security concerns here, some of them, perhaps, even longer-term than al Qaeda, with which we and our Iraqi partners have to contend.

Now, so where can we be a few months from now? We think we can make progress in a number of different areas in that few month period. And I don't want to, again, do any -- it would be in fact premature to stand here now and say, well, this or that -- come September, we think we can either say it's time to do this or time to do that. We'll have to see where we are. There's a couple of different key indicators that we look at to see how we are progressing in terms of the enemy, our forces, Iraqi forces, and then we'll see how long we need to sustain the surge and how long we can sustain the surge as well, because those considerations enter into it as well over the longer term.

Q Yeah, a quick follow-up on that. Should Americans be braced for more casualties if they're moving into these new areas?

GEN. PETRAEUS: Well, you know, I have said now for several months, and so has General Odierno, and so have the other commanders, actually -- General Lynch and others -- that it will get harder before it gets easier.

This month, we had -- touch wood -- been a bit more fortunate in terms of not having some of the really high-casualty events that we had last month. In the last two weeks, for example, I went to one unit for a memorial ceremony, where we memorialized four soldiers that were killed in one improvised explosive device blast. In the week prior to that, we went to one in which six were killed. And some of these really tragic events, obviously are what added up to the tough month that we had last month, and we'll have to see how that works this month.

I mean, we went through a stretch of road already in Baqubah that had 37 improvised explosive devices in it. Now, we were able to find each of them -- and by the way, it was with a great deal of help from locals who helped our forces, because they were tired of basically the boot of al Qaeda being on their neighborhood -- that's the kind of development that will determine in fact how these months go. We have learned a bit -- good bit about some of the deeply buried improvised explosive devices, how they actually have multiple command wires in some cases, believe it or not, sometimes several that are easy to find and then a couple that are not.

So as we move into these areas, they will be contested. There will be tough fighting, and we will certainly try to bring our combat power to bear as much as we can, needless to say, to support our soldiers who are on the ground, the infantrymen walking point for each of these efforts.