Washington has projected the withdrawal of five units by July, which would bring the number of American troops in Iraq down from a current 160,000 to about 130,000 -- the level before a "surge" was launched last February.

Speaking on Jan. 2 in Owesat village on the banks of the Euphrates, about 17 miles southwest of Baghdad near the town of Yusufiyah, Petraeus vowed no quarter would be given in the fight against Osama bin Laden's extremist network, blamed for much of the violence in Iraq.

"We cannot let up -- they are much more on the defensive right now than they have been in years and that is where we have to keep them," Washington's top general in Iraq said as he declared the village of Owesat, just months ago a hotbed of Sunni insurgency, now secure.

"This was a small Al-Qaeda sanctuary that offered an opportunity to go right across the river and right into Baghdad," he said.

"Having this secured is very important to the overall security of the Iraqi capital."

He shrugged off concerns that the American troop withdrawals could see a reversal of gains made in the past six months, when according to U.S. figures, the number of attacks across Iraq has dropped by 62 percent.

"It is very important to remember that our surge is dwarfed by the Iraqi surge that is taking place," said Petraeus, on one of his trademark "battlefield" tours, accompanied by a small group of reporters.

"The official Iraqi security forces has increased by something like 110,000 or so in the past year -- during which (time) our surge was 30,000," he said after visiting the rural village, reaching it on foot by crossing a floating bridge the U.S. military has constructed across the Euphrates.

"There are also 70,000 plus concerned local citizens who are now helping our forces and our Iraqi partners," he added, referring to members of powerful anti-Qaeda fronts being formed across the country by the U.S. military.

The 30,000 American "surge" troops were deployed from February last year in a bid to quell raging sectarian violence that has killed thousands of Iraqis.

According to a Pentagon report last week, the surge has been working, with U.S. forces achieving "significant security progress" in Iraq over the past three months and the number of attacks across the country down 62 percent.

Lean and tanned from his regular walkabouts in Iraqi frontline villages, the 54-year-old Petraeus was upbeat on Wednesday about the ongoing operations against Al-Qaeda.

"Because the Iraqi generation of additional army and police forces will continue throughout 2008, it allows us to hold an area that has been cleared and then we continue to move on farther with our Iraqi partners and the support of the locals," he said.

After meeting U.S. military commanders, tribal sheikhs, local farmers and members of concerned local citizens groups, Petraeus warned that insurgents still posed a dangerous threat in Iraq, as indicated by a suicide bomb attack on a funeral in Baghdad on Tuesday that killed at least 30 people.

While the creation of concerned local citizens groups across the country was paying dividends, he acknowledged that there are concerns over the programme.

"There are understandably a host of issues connected with concerned local citizens ... certainly there are worries that they may be infiltrated by Al-Qaeda or by affiliated insurgent groups, that they could at some point in time turn on the government of Iraq," said the paratrooper, his boots kicking up clouds of dust as he strode along tracks that zig-zag through the farmlands.

"Those are all are legitimate concerns. And the way to address them is to get them incorporated into the official security forces of Iraq and become part of the police with a chain of command that goes all the way to the national ministry of the interior.

"Their pay cheque would therefore come from the ministry. That gives a pretty substantial hold on them."

He cited developments in the city of Fallujah in western Anbar province as further reason he is optimistic Iraq's security forces can take over when U.S. troops begin withdrawing.

"Fallujah, which used to be held completely by an Iraqi army brigade or more plus our marines or soldiers over time is now completely held by Iraqi police ... Our units and Iraqi army units have been able to move outside the city and pursue Al-Qaeda more to the north and south."

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