The top US military commander in Iraq, General David Petraeus, has described the recent fall in violence in Iraq as a "significant accomplishment".
Gen Petraeus has been a high-profile commander in Iraq in 2007
Violence in the country has fallen to its lowest in two-and-a-half years, he told the BBC, but said he was neither an optimist nor a pessimist about Iraq.
He defended the UK handover of Basra to Iraqi forces, despite criticism of the security situation in the region.
However, he calmed suggestions that the US could make a swift withdrawal.
"Irreconcilable" groups - such as al-Qaeda - still active in Iraq remain formidable foes, the general said.
There were "innumerable enemies, and innumerable sombre signs", he said.
Violence in Iraq has noticeably slowed since the US "surge" strategy implemented by President George W Bush and Gen Petraeus this year.
According to recent figures some 536 Iraqis have died in violence so far this month, compared to more than 2,300 in December 2006.
"Everyone agrees that the security situation has improved substantially," Gen Petraeus said.
"The levels of violence, the levels of bloodshed over the past two or three months has declined to levels not seen since late spring of 2005 [or] early summer of 2005.
"It has enabled progress in other arenas as well. You see markets springing back to life, children going back to school in greater numbers."
But he was clear on the need to continue striving to reduce conflict.
"We will certainly, tenaciously and relentlessly pursue those who are the irreconcilables - and of course foremost among those are al-Qaeda Iraq and their affiliates," he said.
Reacting to criticism by Iraqi officials of the recent UK handover of Basra to Iraqi forces amid complaints of militia violence and police corruption, Gen Petraeus said it was time for "Iraqi solutions to Iraqi problems".
"I no longer will use the term optimism nor pessimism. I am neither an optimist nor a pessimist, I am a realist at this point on Iraq.
"I have well over three years on the ground in Iraq, and the reality is that Iraq is hard," the general said.