The two top US officials in Iraq have faced criticism from Democrat presidential hopefuls in Congress.
Gen Petraeus says the surge has reduced violence in Iraq
Senators Joe Biden and Barack Obama told military commander David Petraeus and Ambassador Ryan Crocker the troop build-up had failed to achieve peace.
Senator Hillary Clinton said the two men had been dealt a "very hard hand" and said the US government was failing to pursue a coherent strategy.
Gen Petraeus and Mr Crocker were giving testimony on the hearing's second day.
Both repeated their contention that the military "surge" in Iraq was working, and warned against a rapid withdrawal.
White House officials said President Bush would this week announce plans to reduce US troops in Iraq by about 30,000 by next summer - in line with the recommendations of Gen Petraeus and Mr Crocker.
The BBC's Justin Webb, in Washington, says the president's move is an attempt to seize the initiative and to give the impression - whether true or not - that he is driving events.
'Americans are dying'
Sen Biden - who chairs the Foreign Relations Committee - said the build-up had failed to promote reconciliation between Sunnis and Shia, and was at best "a stopgap that will not prevent chaos".
He concluded: "We should stop the surge and start bringing our troops home."
Sen Obama - one of the Democratic nomination frontrunners - called the war a "disastrous foreign policy mistake" and said the impact of the surge had been modest given the resources.
Sen Clinton, who leads current polls for the nomination, focused on the government's failures.
"I give you tremendous credit for presenting as positive a view of a rather grim reality," she said.
"I believe that you ... were dealt a very hard hand... It's not only the Iraqi government that has failed to pursue a coherent strategy, I think our own has as well."
John Kerry - the defeated Democratic candidate in the 2004 election - questioned the commitment of the Iraqi politicians who he said were stalling while US soldiers sacrificed their lives.
"Is it acceptable that young Americans are dying and being grievously wounded while Iraqi politicians delay and delay and delay meeting their own standards?" he asked.
Although all candidates are opponents of the war, they differ on how the US should withdraw.
BBC defence and security correspondent Rob Watson says the senators' questions will be watched carefully by the party's grassroots supporters, where opinion is running strongly against the continued presence of US troops.
During Tuesday's testimony Gen Petraeus again insisted that the increase in US troop levels had reduced the violence and insisted that "some type of success in Iraq is possible".
Mr Crocker agreed that the surge had "helped change dynamics in Iraq for the better".
"I do believe that Iraq's leaders have the will to tackle the country's pressing problems, although it will take longer than we initially anticipated," he said.
Mr Crocker also emphasised signs of economic progress, pointing to a projected 6% growth for the Iraqi economy in 2007.
Republican Senator John McCain, a contender for his party's presidential nomination, defended the US strategy in Iraq, saying: "Congress must not choose to lose in Iraq and I will do everything in my power to ensure that we do not."
He said failure in Iraq would turn that country into a haven for terrorists and would let Iran come to dominate the Middle East.
But some Republicans senators voiced unease about the Bush administration's policy on Iraq.
Sen Richard Lugar said: "As policymakers, we should acknowledge that we are facing extraordinarily narrow margins for achieving our goals."
Sen Chuck Hagel, an opponent of the war, asked: "Are we going to continue to invest American blood and treasure at the same rate as we are now? For what?"
During Monday's joint hearing of the House of Representatives Armed Services and Foreign Affairs committees, Gen Petraeus said violence had declined since more US troops were sent to Iraq.
He added that about 30,000 troops could be withdrawn by the middle of next year.
A record 168,000 US troops are now in Iraq after 30,000 arrived in the surge between February and June.