President George W Bush has said the US mission in Iraq can still succeed, after a report found Iraq had made mixed progress towards key US targets.
Mr Bush said he found cause for optimism in some of the report, particularly in the field of security.
But he conceded Iraq had "much more work to do" to meet political and economic goals.
The report comes amid growing pressure in Congress on the Bush administration to change course in Iraq.
Mr Bush cautioned that the report was only interim, and said he would only make a decision on US strategy on Iraq once the final report is released in September.
The BBC's diplomatic correspondent Jonathan Marcus says this was an exercise in buying political time in Washington, where opposition to the war - even among senior Republican statesmen - is growing.
Reacting to the report, the Senate Majority Leader, Democrat Harry Reid, urged Mr Bush to listen to the American people, saying: "The war in Iraq is headed in a dangerous direction."
Iraqi Foreign Minister Hoshyar Zebari defended his government's record to the BBC, saying progress on meeting political goals was slow because broad agreement from all communities was being sought.
Iraq's political leaders have agreed on a constitution, he said. "Now they are discussing some other legislation about the sharing of the wealth of the country, about constitutional review. All this needs consensus. We are not working by the majority rule of 50% plus one."
Speaking at a news conference, Mr Bush said the US "can succeed in Iraq and I know we must".
He said troops would only be withdrawn when conditions were right, "not because pollsters say it'll be good politics".
Mr Bush said pulling troops out too soon "would mean surrendering the future of Iraq to al-Qaeda".
"It would mean increasing the probability that American troops would have to return at some later date to confront an enemy that is even more dangerous," he added.
President Bush also singled out Iran, Syria and the Lebanese Hezbollah movement, accusing them of fomenting violence in Iraq.
Iran, he said, was supplying improvised explosive devices to militants there; Hezbollah was training militants to attack coalition forces in Iraq; and Syria was providing a route for suicide bombers heading for the country.
He also denied US intelligence reports that al-Qaeda is as strong as it was before 11 September 2001.
"That's just simply not the case," Mr Bush said, adding that al-Qaeda "is weaker today than they would have been" if the US had not taken offensive action.
The interim Iraq report, ordered by Congress, says Baghdad has had more military than political success since a US troop surge began in February.
Amend constitution to tackle regional issues
Give jobs to former ruling party members
Pass new law on sharing oil resources
Security forces to be even-handed
It says Iraq has made satisfactory progress towards meeting eight targets, but has not done so regarding another eight.
Baghdad has shown mixed results in its progress towards meeting another two goals, it says.
The report says the security situation in Iraq remains "complex and extremely challenging".
It says the economic picture is "uneven" and political reconciliation is lagging.
The report says the Iraqi parliament has so far failed to adopt or even begin to debate crucial legislation for the country's oil industry.
It also warns of "tough fighting" during the summer, saying al-Qaeda in Iraq was likely to "increase its tempo of attacks" before the full report is released.
As the report was released, the UN refugee agency doubled its funding appeal for 2007, asking for $123m to help the millions of Iraqis who have fled the country and the estimated two million people who are displaced within the country.