New Leader, New Strategy -- New Hope in Baghdad

The new U.S. commander in Iraq, Gen. David Petraeus, gives a rare interview to ABC News' Terry McCarthy. Below is an unedited, excerpted transcript of the interview:

McCarthy: You've been here for just about a month now, initial signs seem to be encouraging. Are you -- with what you're seeing in the first early days of this new strategy?

Petraeus: Well the plan's unfolding on schedule, there are few mildly encouraging indicators in baghdad although they sort of go up and down, so you have to hold off on that. But there are quite encouraging indicators in anbar province and then there are some in other areas that are warnings to us that we've got to pay closer attention, for example in diyala province, some of the fault line areas, the sectarian fault lines, we've got to keep a very close eye on.

McCarthy: But Sadr City — who could have imagined American troops could march in to Sadr City and meet almost no resistence?

Petraeus: Well that was a pleasant surprise and it was one that was essentially brokered by the prime minister, by the government of iraq and also by our leaders and Iraqi security force leaders. It was helped by the fact that the numebr of the more extremist leaders of Sadr's milita have left baghdad and in some cases left iraq altogether but it's also been surprising too … the other day, I walked through the City of heet in the euphrates river valley and had on a soft cap and ate an ice cream cone, and that was soemwhat surprising as well. …

McCarthy: No armor in Anbar?

Petraeus: Well, I did have body armor on, I just didn't have a cap on. But it's a start.

McCarthy: As you know of course, this is not just a military issue, it's a political issue both in iraq and domestically. On the domestic front, joint chiefs have indicated they want troops to draw down maybe by the fall -- your commanders on the ground, from general Odierno down say they want to stay longer -- how do you bridge that gap between washington politics and the reality on the ground?

Petraeus: I don't think you do, I think that's not my job. The job of a commander of a force in a situation like this is to understand the mission that the force he's privileged to command has, to make sure he's in line with his boss on that mission, to request the forces that are needed to perform the mission, and then to do the best we can with what we get and if we don't get what we have asked for, to be sure that those above us know the risk that is incurred as a result of that. So we truly are trying to stay out of that…obviously we're aware of the environment in which this is taking place, we're aware that there is a washington clock and then there's a baghdad clock but you need to sort of shut that out to a degree as a commander and to tell them what you need and do the best you can with what you get.

McCarthy: The talk in Washington is that Labor Day is not a deadline to succeed here but labor day is a time to judge how progress is going. In september of this year, you said that you would go back to the American people, both to congress and the American people and give a report card of how things are going. What would be your optimal level of achievements here this year?

Petraeus: There needs to be an imporvement on both the security front and the political front and, of course, one reinforces the other which reinforces the other because there's a bit of a spiral effect - you're either spiralling down or spiralling up. Clearly we need to improve the level of security in baghdad and ideally in some of the other fault line areas and there are some key indicators in that regard, the level of sectarian murders particularly needs to be considerably lower, sectarian displacement needs to be a thing of the past and ideally you have people returning to their homes and have returned to their homes by that point in time. And again on the political side within iraq, there will need to have been some fairly substantial progress in certain key areas , to actually finalize the oil revenue law, to come to grips with the so-called truth and reconciliation, the reform of the debaathification, but also some degreee of accounting that takes place, probably a determination of the provincial powers and there's a variety of other issues that have to be resolved by the Iraqi political leaders and are crucially important, in fact, to improving security, not just to an end to settling political differences.

McCarthy: You've just outlined some of the areas of concern -- what evidence do we have that there's progress in any of those areas at the moment? I know that the oil law has been submitted to parliament, what evidence do we have that this is going to work?

Petraeus: I think, again, you mention the oil law, that's very, very important. There's been progress behind the scenes on the reconciliation issue that is very important and you just keep chipping at them one-by-one. Just the fact that the prime minister sincerely wants to be a prime minister for all Iraqis, wants the governemtn to serve all Iraqis that's very important. The fact that he's had his security forces take down all serious milita leaders from an organization that helped put him in power is very important so there are a number of these atmosphere and substantial achievements that indicate that this government is serious about getting done what needs to be done for iraq and we'll just have to see now if that momentum can be built on and continue through the srping and summer.

McCarthy: You really think that Prime Minister Maliki will take on the mahdi army and not just allow them to evaporate for the time that your troops are here until they come back?

Petraeus: He agrees with the idea that there are irreconcialiables and there are reconciliables , in other words extemists that are on either side of the sectarian divide and also in the criminal ranks and those individuals have to be brought to justice, captured or killed in some cases. Then there are the reconcilables that are the ones influened by these extremist leaders and the worse the violence gets, the more they are influenced because the more they are trying to save their own hide to the point that they can even influence individual units of the Iraqi security forces as was the case during the course of last year.

Some of these leaders have to be held to account, they are individuals who have done things that are so reprehensible that they must be brought to justice and our indication is that he is willing to do that and in fact he has done that in some cases already. And the fact is that we have some 700-members of the Sadr militia in our detention facilities with his support so I don't think there's any question that he's willing to do that although again, what he's like to do, as any political leader would like to do, is to draw as many people as possible into being part of the solution instead of a continuing part of the problem. And that's exactly what we're seeing in anbar province as well, where some of the tribes are tacitly accepting what the insurgents and perhaps even al qaeda were doing out in the heart of the sunni opposition, anbar province, and now a number of them have fled and they are opposing al qaeda in iraq because al Qaeda has finally killed too many of them, too many of their sheiks, their relatives and they've stood up and said 'enough', and that has happened in and around Ramadi, throughout the streets of heet, because the tribes stood up and said let us be a part of the police and we can solve this problem for you, with you and it happened in al qaim and also in certain parts of fallujah.

McCarthy: With tremendous amount of risk to these local sheikhs and their followers because this is a very bloody province, as you know…

Petraeus: To be the first ones to step forward takes -- it's no tiny heart syndrome folks in that crowd and in fact the original sheikh who came fporward in the ramadi area, one of the deals was that one of the first police stations went outside his house and then it's rippled on from there and that has continued and I think you'll see in the days ahead, the Iraqi governement reaching out to members of the provincial government, to these tribes and to the security forces and the security force leaders in anbar province to demonstrate that this government, which since iraq is a shia majority, is largly shia majority government -- but to show that they in fact do care about the sunni arabs in the province like anbar province.

McCarthy: this notion of reconcilables and irreconcilables is central to counter-insurgency and it's a decision, or call that your commanders have to make every day when they meet people on the ground, there are bad guys, are they too bad or are they people they can deal with? How do you draw the line between who's reconcilable and irreconcilable?

Petraeus: I think their actions probably draw all those lines for them, but i'd also say that in a counter-insurgency, and this is more than a counter-insurgency, it's really counter-terrorism because of the extremists, is countering gang warfare with the violent criminals. Thre's even aspects of peace enforcement and so for them a lot of different things in one so you have to have soldiers who really understand and get it and we think our soldiers and our leaders do get it, a number of them are here for a second time and some here for their third time. Our job of senior leaders such as general odierno and myself and others is to paint white lines on the road and allow them to move on down the road and to demonstrate initiative, exercise initiative, and try to stay with the commander's intent, and re-draw white lines every now and again as the situations changes. But individuals out there are going to vote with their actions as to whether they are reconcilabel or irreconcilable.

McCarthy: If we take the al Qaeda element from this for the moment, if we accept that these are terrorists that want to hurt people, the other parties to this conflict, the shia militias, the sunni insurgents, they're not doing this because they want to be violent for fun, they're doing this because they see their vital interests at stake. Can you help me understand what they're thinking, what are the sunni insurgents thinking and perhaps hoping and similarly what's going on in the minds of the shite militias?

Petraeus: Some the insurgents aren't just thinking, they're speaking and they are saying that they are breaking away from al qaeda. What they want is their palce at the table in the new iraq and in fact it would be if what is happening in anbar provice will result in the formation of a sunni arab identity, one that could make their voice heard in baghdad, add their weight to the sunni arba political leaders in the capital and ensure that they're represented in the seats of power so that's what they're thinking. The shia militia, everyone's out to get his share of the power of the ability to provide jobs, to ensure the basic service of that constituency, and also when their security is threatened, to ensure security for the population and that's one where we have to help provide the Iraqis with security with legitimate security forces so that various groups don't have to depend on Sadr's militia or some other militia.

McCarthy: One of the problems that has been repeatedly remarked upon is that the sunnis don't have a leader -- Do you see a figure coming forward? Somebody that can help unite the sunni voices because they need someone who can sit down at the table?

Petraeus: They do and there are a number of different leaders who are out there, some who are actually in government, some who are emerging again in palces like anbar province. And I think the events of the months ahead will start to have some of these leaders emerge and have real constituencies that can enter into the debate in baghdad in a very meaningful way. The Sunni Arabs lost out in january 2005 when they boycotted the election, they lost out when they allowed their own security force leaders to be intimidated…they lost out when they didn't have the representation in the constitution because they hadn't voted … although efforts where always made to include them, for example in the constitution, the perceptrion is still that they don't have a seat at the table I think you'll see prime minister maliki and other members of his cabinet reaching out to sunni arabs in meaningful ways in the days ahead.

McCarthy: we just had the conference over the weekend with iraq's neighbors, it looks like it may move to a higher level conference in april with a foreign ministry level with secretary rice and so on - how important is the foreign involvement in iraq to your job -- how key is that to what you do?

Petraeus: it's very important, don't think there's any doubt that the major entry for foreign fighters in iraq who are those blowing themselves up and that's a hugely important. It's a relatively small but enormously important sensational element of this particular security environment because they're willing to kill themselves, to kill a lot of innocent civilians and in many cases and to make this powerful statement, they are coming through syria I don't think anyone doubts that, they seem to be able to come through damascus and then to make their way to iraq through a variety of different routes, one through the euphrates river valley which is why it's so important to expand the control via ramadi and heet and al qaim to some of the other key cities out there.

There's no doubt that some elements are from iran and we don't know who is ordering it and that's immaterial -- if there's someone ordering that's terrible, if there's someone not ordering it then they're out of control, so it's bad in any respect that there are elements of the quds force and other elements from iran who have been training individual who have been coming in to iraq and perfoming illegal activities that they have provided explosively formed penetrators, these most lethal of anti-armor IED, that they've sent rockets, mortars and other explosives and munitions in this coutnry, that's indisputable and again it's a very, very problematic situation for our soldiers and Iraqi soldiers. And if it's something that can be bought to a halt through these intiatives of the Iraqi government we would applaud that vigorously.

McCarthy: one of the issues of contention at that meeting was the detention of the iranian nationals by us forces -- the Iranians claim that some of them were diplomats, Amb. Khalilzad said definitively we do not hold any iranian diplomats. Either way are your forces going to continue to pursue iranians, iranian nationals in iraq whom you think are acting illegitemately in this country?

Petraeus: we're not pursuing iranian nationals, we are pursuing individuals who are taking part in illegal activities that are killing and maiming Iraqi and coalition soldiers, not distinguising between who they are if theyre involved in that kind of activity then we have an absolute right, an obligation to take them off the street and hold them to account.

McCarthy: The establishment of these bases around baghdad where troops will eat, breath, sleep with local people -- again, classic counter insurgency doctrine, requires a lot of time - every manual that I read says counter insurgency requires time -- will you have enough time to make a difference?

Petraeus: Our job is provide progress and then we'll leave it up to other to determine if that's sufficient and fast enough… we're not policy makers, we're the guys in uniform, we have a mission, we're trying to do the best we can to accomplish that mission- if you're going to secure a population, you're going to have to go in to it and you have to go live in it and it's very interesting that some of the battallion commanders have remaked that after they've been in a neighborhood for 5 days or so, they go from information deficit to information overload, where before they couldn't get the information to go precisely where the bad guys are and all of a sudden when the citizens realize that these individuals are there to stay, they come out of the woodwork and they provide them with plenty of information in fact so much so that then it becomes an analytical challenge rather than an information challenge.

McCarthy: Can the U.S. win this war?

Petraeus: This is not up to the U.S. To win, it's up to the coalition and the Iraqi security forces to provide a window of opportunity for the Iraqi political leaders to win this war, to resolve the issues that are the cause of some of the violence here, some it the extremist elements, that's a different element and they are truly irreconcilable in many respects but there are number of others who could throw in with the new iraq if they felt that they could be guaranteed security, if they were guaranteed a place at the table, if they felt they were represented in the halls of power in baghdad.

McCarthy: Your last tour here, you were in charge of training Iraqi forces -- what's your report card on that -- how do you view the readiness of Iraqi forces to take over some of the responsibilities that the us troops are now carrying out?

Petraeus: I just did a review today with those that are carrying that effort forward and ther has been very substantial progress bu it is uneven and there is no question but that some Iraqi elements, particularly during this sectarian pressure that was exerted on them in the latter half of 2006, succumbed to some of that. Some of them did become part of the problem instead of part of the solution, some of those have been dealt with, some of the national police elements have gone through a so-called 're-blueing' process, leaders have been replaced, leaders have been jailed, in some cases, so there were some serious problems with some of the elements particularly throughout the course of the past year and those are not over, there are still some who are identified are as being too friendly to one militia group, or to another and again they have to be rooted out and they have to be corrected over time.but the fact is that iraq has a very substantial army, it has quite a substantial police force, they are reasonably well-equipped, there are thousands of armored humvees out there in the Iraqi forces, there's a mechanised division, they have helicopters even now, they have C1-30 aircraft, they have training bases, they have academies, they have staff colleges and it goes on and on so the institutions are graduallly coming to life and if there's anything that's holding them back now, it tends to be uninteresting stuff. But the professional stuff which is logistics and administration and can they be paid on time and can they get the fuel on time, what about who's got the food contract and so forth, those are the challeneges they're coming to grips with now.

McCarthy: another story that's coming out of Washington, the Pentagon supposedly looking at a fallback strategy of pulling us troops back and leaving them in an advisory role, the template for that is el Salvador, I think also the Philippines, a country where that advisory role has been carried out by us military forces. Can you see us getting to that point in iraq where we would not be fighting a war but just advising the Iraqis on how to train their own men?

Petraeus: There's a lot of options dependent on success or not achieving success, the truth is that our forces and multi-national forces are , we are focused on trying to make this effort go forward, I think the secretary of defence has mentioned that it would be irresonsible if you weren't looking at some other options, we're happy to leave that to them for the time being and try to get our additional forces on the ground, get them introduced to baghdad in to the belts around bagdhad and to make a go of the effort that we have launched and is under way now.

Can I add something to an earlier one -- the fact is that the Iraqi security forces are not only capable, they are in the fight, and they are fighting and dying for their country, in fact their casualty levels typically, on a given day, are a good bit higher than ours, it's not because they don't have M-1 tanks it's because they're actually out front in many, many different locations, you go thought the vast majority of checkpoints in the Baghdad area and you encounter an Iraqi soldier or an Iraqi policeman before you encoutner the us soldier who may be on an overwatch behind them. They are the ones who are often in the league where they can, we're supporting them. When they can't, we do link arms with them and carry it forward but they are bearing a lot of the brunt of this particular effort.

McCarthy: We saw 7 blown up in Sadr City…

Petraeus: We did indeed in fact, that was one of those tragic bad news but good news stories to a degree. The terrible news is that there are seven Iraqis martyred, the good news is that they did their job and they prevented a vehicle bomb from pentrating into Sadr City where there's a very dense population and blowing up and killing dozens of Iraqis. So they gave their lives for their country, they did their job. There was a case today where they did their job but they were able to blow it up before it actually and they did take some casualties but a relatively small number.

McCarthy: Let me ask you finally about Iraqi civilians - polls are now showing that 60% of Iraqis think it's legitimate to attack us forces here -- if you ask sunnis it goes up to 90% -- how do you change that mind set among Iraqi population that the us troops are here to get over this sectarian conflict that is killing so many people and they're not the enemy that you have to shoot at?

Petraeus: We've seen the opposite, we have seen where in polling data where us soldiers, coalition soldiers are actually in many areas liberators again in part because so many of these neighborhoods in baghdad sufered substantially from sectarian violence. They, in many cases, welcome coalition forces. I was out in an area of south east baghdad, we drove around, we walked through the largest area in Baghdad and were greeted very, very warmly, we helped the local economy , we bought some fresh orange juice, and chai and a variety of other things and again got a very warm reception. It's aj area where they wall off the market so they know they can't get penetratedby another car bomb as they were about 4 weeks ago before operatiom fardh al Qanoon started, we went through the shorja market, and we actually got thumbs up from folks yesterady again.

We actually do this monthly and in effect, we tended to get a sense that folks were happy to see coalition soldiers together with Iraqi soldiers and police. This is a design by the Iraqi leaders, prime minister maliki wants all three elements together, coalitions soldiers, Iraqi soldiers, and Iraqi police and he likes that combination. He thinks that gives confidence to the Iraqi people, because different segments of the population are less comfortable with certain parts of the Iraqi army or us, but all three together seem to inspire a degree of confidence within.

McCarthy: The other big change that I see and that our data seems to support in the last year in particular has been a complete cratering in optimism -- after the invasion, people looked for a better life, business improved for a lot of people, things did improve - now in the last year, people seem to have lost all hope that life can get better -- we talked to so many people that either want to leave or have given up any hope for themsleves -- how do you restore that hope to a population that has been so traumatized, especially in the last year?

Petraeus: They have suffered a great deal and the way to restore hope to is to help them feel secure and again, live in their neighborhood with them, help establish basic services, help them get the market revitalized, help them get the bank reopened. Over time, we can establish better electrical services, so that's exactly what we and our Iraqi counterparts are trying to do.