Allawi insists Iraq is succeeding

Allawi said Iraq would hold elections on time in January

Iraqi Prime Minister Iyad Allawi has told a joint session of the US Congress that his country is succeeding in establishing freedom and democracy.

This was despite a "tough struggle with setbacks" such as the murder of two American hostages this week.

The group that seized the two men has threatened to kill a third hostage, British engineer, Ken Bigley.

At a press conference after the speech, President Bush said the situation in Iraq was reaching "a decisive moment".

Mr Allawi strode into the US Congress to a standing ovation from almost everyone in the chamber.

He said the overwhelming majority of Iraqis were grateful for the sacrifices the American people had made so that Iraq could be free of Saddam Hussein and have a better future.

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"We are succeeding in Iraq. It's a tough struggle with setbacks, but we are succeeding," he said.

"We Iraqis know that Americans have made, and continue to make, enormous sacrifices to liberate Iraq, to assure Iraq's freedom," he said.

"Today, we are better off, you are better off, the world is better off without Saddam Hussein. Your decision to go into Iraq was not an easy one, but it was the right one."

He repeated - to renewed applause - that it was wrong to negotiate with hostage-takers.

He also said that elections scheduled for January next year would go ahead as planned.

Mr Allawi's resolutely upbeat message was well judged to appeal to his American audience, says BBC Middle East analyst, Roger Hardy.

They, like him, want to believe that Iraq is on the road to freedom - and that the terrorists, as he called them, will not be able to stop them, our correspondent adds.

'Decisive' period

In a press conference held at the White House after the speech, President Bush said events in Iraq were coming to a head with upcoming elections.

"Terrorist violence may well escalate as the January elections draw near. The terrorists know that events in Iraq are reaching a decisive moment," he said.

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Mr Bush said the US must remain in Iraq to fight insurgents, whom he said are part of the global terror threat.

"If we stop fighting the terrorists in Iraq, they would be free to plot and plan attacks elsewhere, in America and other free nations," he said.

He outlined the progress made in getting the country ready for elections and preparing a fully-fledged security force, as well as improving the country's infrastructure.

Mr Allawi said a majority of the 18 Iraqi provinces were ready to hold elections "tomorrow" if necessary, and that the violence was concentrated in three provinces only.

"If elections go forward, democracy in Iraq will put down permanent roots, and terrorists will suffer a dramatic defeat," Mr Bush said.

In New York, UK Foreign Secretary Jack Straw said the elections were a way of improving security in Iraq and that was the reason there had been a rise in violence there over the last three or four weeks.

"The terrorists are trying to stop the elections. Some victims have been foreign nationals including the two Americans who were kidnapped and killed and we obviously think about Mr Bigley. Most of the victims overwhelmingly have been Iraqis."

Hostage crisis

Mr Bigley's brother, Paul, accused the US on Friday of "sabotaging" his brother's release by refusing to free a detained woman scientist in Iraq.

Paul Bigley told the BBC there had been "a shadow of light" when Iraqi ministers said the woman would go free.

But the US ruled out freeing the woman - one of two held in Iraq - saying it would not give in to the kidnappers.

Kenneth Bigley was seen in a video appealing to UK Prime Minister Tony Blair to help save his life.

His Thai wife made an appeal afterwards asking the captors for mercy.

"My husband, Ken, is an ordinary, hardworking family man who wanted to help the people of Iraq among whom he made many friends. As a loving wife, I beg you once more for mercy," Sombat Bigley said.

The Iraqi government insisted on Thursday that it would not release two female weapons scientists despite statements on Wednesday that it would.

Meanwhile Italy says it cannot confirm reports that the two Italian hostages in Iraq, Simona Pari and Simona Torretta, have been killed.

Italian government officials said the website carrying the reports was unreliable and there were no photos or video footage.