US President George W Bush has said "tangible progress" has been made in rebuilding Iraq's economy, but this had "not always gone as well as we hoped".
Mr Bush is using Najaf and Mosul as examples of progress
In a speech aimed at winning US public support ahead of the Iraqi general election next week, Mr Bush focused on the rehabilitation of public services.
The cities of Najaf and Mosul had seen improvement, he said, but poor security had hampered reconstruction efforts.
Mr Bush has come under growing pressure from Democrats on the issue of Iraq.
Opinion polls give him the lowest approval of his presidency and suggest waning public support for the Iraq mission.
The speech comes as Democrats are releasing a report saying the US faces a reconstruction gap in Iraq.
Progress and concern
In his speech to the US Council on Foreign Relations, Mr Bush said schools had been refurbished, water restored and a sports stadium re-opened in Najaf.
In Mosul, local Iraqi leaders have upgraded key roads and bridges over the Tigris River and rebuilt schools and hospitals, he said.
Residents were "gaining a personal stake in a peaceful future," the president added.
"The progress in these cities is being replicated across much of Iraq."
However, the president also conceded that both cities still faced challenges, in part because of security conditions hampering reconstruction.
He said the process in Najaf had "been uneven", where problems included electrical outages and a shortage of clean water.
"Rebuilding a nation devastated by a dictator is a large undertaking," he added.
Democrats say the president needs to produce a clearer plan on Iraq.
Basic needs such as jobs, essential services and health care remain unmet, the Democrats' report said.
"Just because he says things are improving there, doesn't make it so," said Nancy Pelosi, the leader of the minority in the House of Representatives.
Mr Bush's speech was the second in four to answer criticism about the US presence in Iraq.
In an address last week, Mr Bush said he would not accept "anything less than complete victory" in Iraq.
He refused to set an "artificial deadline" to withdraw US troops, saying it was "not a plan for victory".
The address came after the release of the first Iraq strategy document, which rejected widespread calls for a timetable.
There are currently more than 150,000 US troops in the country. The White House has said it expects conditions will permit a reduction in US troop numbers next year.