US ambassador to Iraq Zalmay Khalilzad has said stabilising the country is possible in a realistic time-frame, despite ongoing sectarian violence.
Gen Casey says Iraqi security forces are 75% ready
He said there would be setbacks, but the goal of creating a multi-ethnic and multi-faith Iraq remained unchanged.
In a joint news conference, the US military commander in Iraq reaffirmed his belief that Iraqi forces could take over security within 18 months.
The statements came amid speculation over Washington's strategy over Iraq.
At least 90 US troops have died in fighting this month - the highest monthly toll since November 2004.
BBC World affairs correspondent Paul Reynolds says the thrust of the briefing was one of reassurance, perhaps to US voters as they prepare for next month's mid-term elections.
As the two US officials spoke in Baghdad, violence continued across the country. Among the incidents:
- US soldiers shot dead four Iraqi firefighters they had mistaken for insurgents in the western city of Falluja
- A car bomb in Baghdad wounded 13 people
- Two policemen died in Amara, in an attack blamed on Shia militiamen
Mr Khalilzad acknowledged that the recent bloodshed had made many Americans question whether the US could succeed in Iraq.
But he added: "Success in Iraq is possible and can be achieved on a realistic timetable."
The ambassador went on to say that the outcome would "profoundly shape the wider struggle and in turn the security of the world".
The US, he said, "should make adjustments in strategy" and redouble its efforts to succeed.
Mr Khalilzad outlined initiatives to try to stabilise Iraq, including a plan to reform Iraqi security ministries which he said should be ready by the end of the year.
He said the Iraqi government had agreed to develop a timeline for progress by the end of the year.
But the envoy made no mention of opening a dialogue with either Syria or Iran, which he accused of supporting armed groups in Iraq.
At the news conference Gen George Casey, the top US military commander in Iraq, said Iraqi security forces would be able to assume responsibility for the whole of Iraq within the next one-and-a-half years with minimal US help.
He said the process of building up Iraq's own security forces to a level appropriate for this was 75% complete.
Gen Casey said that although the situation was "hard", Iraq was not "awash in sectarian violence".
He stated that 90% of sectarian attacks occurred in or near Baghdad, and 90% of all violence in five of the country's 18 provinces.
The general praised Iraqi soldiers and police, who he said had suffered over 300 casualties in the Muslim holy month of Ramadan.
He said the US should continue to focus on reducing troop numbers in Iraq, adding that he would not hesitate to ask for more troops if necessary.
Meanwhile in Washington criticism of the administration's Iraq policies continued, exactly two weeks before key mid-term congressional elections.
Ike Skelton, a senior Democratic congressman, said the timeline for a security handover should have been shorter.
"Increasingly and more quickly the Iraqi forces will have to shoulder this burden," he said.
Senator Lindsey Graham - a member of President George Bush's own Republican party - told the Associated Press news agency: "We're on the verge of chaos, and the current plan is not working."
However, National Security Adviser Stephen Hadley said the Iraqi government was moving to quell sectarian violence.
But in the interview with National Public Radio he also said: "I think they've got to do more and they've got to do it faster."
An opinion poll conducted during the last few days for CNN suggests that only 20% of Americans think the war is being won. The figure was 40% a year ago.