US Defence Secretary Robert Gates, who is visiting Iraq, has said the country is at a "pivotal moment".
He was speaking in the southern city of Basra where he held talks with American and British troop commanders.
The Bush administration recently unveiled a new strategy for dealing with the conflict in Iraq, including sending more than 20,000 extra troops.
Coalition commander Gen George Casey said it could be summer before these reinforcements produced results.
Most of the additional forces will be sent to Baghdad as part of a US-led drive to bring security to the city.
Mr Gates's visit, his second since he succeeded Donald Rumsfeld in December, comes amid increasing US pressure on Iraq's government to crack down on insurgents.
"Whatever one's views on how we got to this point, here in Iraq at this pivotal moment, there is widespread agreement here that failure would be calamity for American national interests and those of other countries as well," Mr Gates said.
"Given what is at stake, failure is not an option," he told a news conference.
Basra security
Gen Casey, who is due to be replaced soon by Gen David Petraeus, said it was too early to say how long the US military would have to keep more troops in Baghdad.
"I think it's probably going to be the summer, late summer, before you get to the point where people in Baghdad feel safe in their neighbourhoods," Gen Casey said.
Commanders could then start to make decisions on the overall size of the US force, he said.
The extra US troops in Baghdad are due to be backed up by three more army brigades pledged by the Iraqi government.
On Thursday Iraqi Prime Minister Nouri Maliki appealed to the US to give Iraqi forces more weapons and equipment.
About 7,000 UK troops are stationed in Basra. The UK government has said it hopes to transfer Basra's security to Iraqi forces early this year.
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