The US ambassador to Baghdad, Zalmay Khalilzad, has said the death of Abu Musab al-Zarqawi last month has had no impact on the violence.
Zarqawi died after a US air strike on a house in Baquba
But he said the killing had encouraged some insurgent groups to join government reconciliation talks.
Mr Khalilzad admitted the situation in Iraq was difficult, but said the US had "no other option than to persist".
On Tuesday, the deputy electricity minister was kidnapped along with at least 19 bodyguards.
In a wide-ranging interview with the BBC on US Independence Day, Mr Khalilzad said the death of Zarqawi - the then leader of al-Qaeda in Iraq - had encouraged "other insurgent groups to reach out, because some were intimidated by Zarqawi.
"But on the other hand, in terms of the level of violence, it has not had any impact at this point. As you know, the level of violence is still quite high," he said.
Mr Khalilzad said there had been discussions between insurgent groups and both Iraqi and US authorities.
"We want to know the groups that are reaching out - who they are, what capabilities they have, what areas they control - to develop confidence that one is dealing with people who can really do something and have the ability to affect the situation," he said.
Mr Khalilzad said a spate of allegations of atrocities by US soldiers was "very unfortunate". Each such allegation was properly investigated, he said, but insisted that the "vast majority" of US soldiers were doing an "excellent job".
Mr Khalilzad also commented on a leaked memo he wrote to Washington, reported about two weeks ago, which painted a grim picture of the daily stresses and fear endured by US embassy staff.
He said it had been "important to let the leadership of our country know what risk the Iraqis are taking to help us help them".
Despite the difficulties, Mr Khalilzad predicted that there would be "significant reductions" in the 120,000 US troops stationed in Iraq in a year's time - assuming that there was progress on increasing Iraqi capability on security, and success in government efforts toward reconciliation.
He admitted Iraq was in a "difficult transition.
"It has made a lot of progress but it still has a long way to go. It is a difficult situation but we've got no other option than to persist and succeed."