President George W Bush has declared a "major strategic shift" in Iraq following the US troop surge.
He said the US now held the initiative and was looking to deliver a "crippling blow" to al-Qaeda in the country.
US troop levels in Iraq are now due to be reduced by about 20,000 by July, but Mr Bush said after that, the "drawdown" process would be frozen.
Then, he said, senior commander General David Petraeus would have "all the time he needs" to assess the next step.
Gen Petraeus had called for a 45-day "period of consolidation and evaluation" after July, before any more troops left.
Graph of US troops and military deaths
Mr Bush said: "I strongly support that. And therefore I won't commit beyond July."
Signs of progress
The president said that since the launch of the US troop surge 15 months ago, there had been significant military, political and economic progress in Iraq, and that "today we have the initiative".
Read a transcript of President Bush's speech [24k] Most computers will open this document automatically, but you may need Adobe Reader
He said sectarian violence had decreased, and Iraqis were increasingly turning against al-Qaeda. Meanwhile businesses were reopening and national laws were being passed.
By July the US presence should be reduced from 20 brigades to 15 - leaving about 140,000 troops in Iraq, about the same number as were present before the surge began in early 2007.
Mr Bush is portraying the withdrawal as a sign of the success of the surge, and is trying to make as much capital from it as possible, says the BBC's Adam Brookes in Baghdad.
But by referring to a "major strategic shift" he has used language that Gen Petraeus and US ambassador to Iraq Ryan Crocker have deliberately avoided, our correspondent adds.
US Defence Secretary Robert Gates later emphasised that he expected the drawdown to resume later in the year.
"The hope, depending on conditions on the ground, is to reduce our presence further this fall," he said.
Mr Bush also said he was cutting tours of duty in Iraq and Afghanistan from 15 to 12 months, effective from 1 August, and that service personnel would have a year at home for every year served overseas.
The decision to halt withdrawals means the US presence in Iraq is likely to last well beyond January, when Mr Bush will leave office and a new president will take over.
Iraq is one of the key battlegrounds of the election campaign, with Republican John McCain arguing for continued engagement while Democratic rivals Hillary Clinton and Barack Obama call for full withdrawal.
Optimistic
Mr Bush said the two main threats to US progress in Iraq were al-Qaeda and "the destructive influence of Iran", and that US failure would allow both to increase their influence in the region.
However, he insisted the outlook was optimistic, saying: "Fifteen months ago, Americans were worried about the prospect of failure in Iraq; today, thanks to the surge, we've renewed and revived the prospect of success."
Democratic leaders welcomed Mr Bush's shortening of combat tours, but said keeping troops committed to Iraq was unacceptable.
The speech "can only be described as one step forward and two steps back," said the leader of the Democrats in the Senate, Harry Reid.
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