"Assuming that the Iraqi leaders deliver on the commitments that they have made -- and I don't have any reason to doubt that ... I believe that Iraq will make significant progress in the coming 12 months," said U.S. Ambassador to Iraq Zalmay Khalilzad in a rare joint press conference with Gen. George Casey, the commander of the U.S.-led coalition formally known as Multi-National Forces -- Iraq.

"It's going to take another 12 to 18 months or so till I believe the Iraqi security forces are completely capable of taking over responsibility for their own security; still probably with some level of support from us, but that will be directly asked for by the Iraqis," Casey said.

"If the political leadership of Iraq can come together and resolve the basic issues that are dividing them, I believe we can make good progress on the security front, and that coupled with the already good progress with the Iraqi security forces, I think, can put Iraq in a very good place in 12 months."

The press conference came two weeks before a mid-term congressional election that will hinge on public opinion about the Iraq war, and a week after a U.S. military spokesman provided a grim assessment of the four-month-long battle for Baghdad.

It also comes as the Pentagon and White House try to adjust their strategy in Iraq, fighting a counterinsurgency while trying to both pressure and help the Iraqi government to solve the political issues that perpetuate the sectarian divisions in Iraq.

After years of insisting that a timeline for withdrawal would only encourage insurgents and Al-Qaida to continue their fight, Pentagon officials have privately shifted their thinking slightly to embrace timelines for achievement. They explain that in 2005 and 2006, there were three timelines that drove the Iraqi people - interim elections, a constitutional referendum, and then national elections. Each of these dates served a forcing function -- troops had to be ready for election security, the constitution had to be written, political parties had to be formed.

Without external timelines now in Iraq, the hard work of compromise, governance, and the provision of basic services has languished, they believe.

To that end, Khalilzad and Casey introduced the notion that the Iraqi government has been put on a timetable to determine how oil will be shared, to amend the constitution to incorporate Sunni concerns, to change the punishing de-Baathification program into a reconciliation program, to disarm militias and death squads, set a date for provincial elections, and continue to improve their security forces.

"Despite the difficult challenges we face, success in Iraq is possible and can be achieved on a realistic timetable. Iraqi leaders must step up to achieve key political and security milestones on which they have agreed," Khalilzad said.

Khalilzad did not say what the United States would do if the Iraqi government failed to meet the benchmarks on time.

But the consequences of failure in Iraq are high, Khalilzad said.

"More than Iraq is at stake. The broader Middle East is the source of most of the world's security problems, as was Europe in previous centuries," Khalilzad said. "This is the defining challenge of our era. The struggle for the future of the region is between moderates and extremist political forces. The outcome in Iraq will profoundly shape this wider struggle, and in turn, the security of the world."

Casey left open the possibility that the United States could send more troops to Iraq, but said the real issue is political progress.

"Do we need more troops to do that? Maybe. And as I've said all along, if we do, I will ask for the troops I need, both coalition and Iraqi. But I think it's important for all of us to understand right now that we're not going to have total security here in Baghdad until the major political issues that are dividing the country are resolved," he said.

Casey acknowledged the continued problem with Iraq's national police. An entire brigade was taken off duty for retraining in October when they were found to have kidnapped and killed Sunnis from a meat packing plant. Over the next year all the national police brigades will undergo a similar three-week training program, to rid them of death squad members and reinforce human rights training.

"We still have to get at the loyalty issue with them, and that's something the minister and us are working very closely on," Casey said. "Our intent is to work with the ministry to actually change the composition and ethos of these forces."

One of the key players in sectarian fighting is the militia loyal to the Shi'ite cleric Muqtada Sadr. Khalilzad said Prime Minster Nouri Al-Maliki believes Sadr has disavowed the militia and now wants its disarmament, and that he supports the Iraqi government. "We just need to test that with implementation," Khalilzad said.

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