Last January, I wrote that I would give the surge 'til November (later changed to year end), and if there was no discernible progress, I would opt for Plan B, which would be an orderly, phased unilateral withdrawal of American forces.  From what I've seen, I think we should stick with Plan A.  December was another month of low civilian casualties...

...and the three month moving average also illustrates this favorable trend.

More below the fold...

And military casualties are following that trend as well.

The improved security situation has contributed to higher oil production .  Also surging is confidence in the Iraq economy .  Last month, in its report to Congress, the Dept. of Defense summarized the situation , and following is the executive summary:

The strategic goal of the United States in Iraq remains a unified, democratic and federal Iraq that can govern, defend and sustain itself and is an ally in the war on terror. This report measures progress towards, and setbacks from, achieving that goal during the reporting period (September through November 2007). There has been significant security progress, momentum in reconciliation at the local and provincial levels and economic progress. However substantial the security progress made since the last report, sustained and durable progress depends on further progress in attaining political and economic objectives. The United States, its Coalition partners and others in the international community remain committed to assisting the Government of Iraq (GoI) in capitalizing on this progress.

The continued implementation of the New Way Forwardstrategy combined with the surge in overall force levels in Iraq has considerably improved overall levels of security during the past quarter. Improved security is beginning to achieve momentum that, if maintained, may lead to sustained stability. The "tribal awakening" movement has grown as an increasing number of sheikhs—Sunni and Shi’a—have chosen to stop resisting the Coalition. They are instead working together with the GoI and the Coalition, including with Provincial Reconstruction Teams, to improve security and economic conditions at the local level. "Concerned Local Citizen" (CLC) programs have been established through which members of communities work with Coalition and Iraqi forces to protect their neighbor-hoods and critical infrastructure, with greater than 75% under U.S.-funded contracts. This program enhances the ability of Coalition and Iraqi forces to interact with local residents and obtain information on insurgents and illegal militia activity. The CLC movement is proving crucial to the counterinsurgency effort and will require continued support. Efforts to transition these CLC personnel to regular positions in the army or police or to provide other employment opportunities are underway but these efforts are moving slowly. The pace of integrating the CLC members into GoI institutions, lack of alternative employment and fears by the Maliki government that these forces may return to violence or form new militias are of concern.

The number of security incidents has fallen significantly and is now at levels last seen in the summer of 2005. Although ethno-sectarian violence continues to be a concern, overall civilian casualties, enemy attacks and total improvised explosive device attacks have decreased markedly over the reporting period. For example, the number of high-profile attacks in Iraq declined by over 50% since March 2007. The overall reduction in security incidents can be attributed to several factors, including the continued decrease in capabilities of al Qaeda in Iraq (AQI) and militia extremists, increased tribal initiatives against AQI and other extremists, Muqtada al-Sadr’s ceasefire order to his Jaysh al-Mahdi militia, the increased capability of the Iraqi military and police, the separation of Iraq’s previously mixed sectarian communi-ties into homogenous neighborhoods and the sustained presence of Coalition and Iraqi forces among the population.

Coalition forces continue to transfer responsibility for security to the GoI. Karbala Province transitioned to Provincial Iraqi Control (PIC) on October 29, 2007, bringing the total number of provinces for which the GoI has lead security responsibility to eight of eighteen provinces. In particular, Anbar Province continued to show significant improvements in security. Despite AQI’s assassination of Sheikh Abd al Sattar Biziah Fitikhan al Rishawi on the first day of Ramadan, the Sahawa al Iraq (SAI) movement, under the leadership of his brother Sheikh Ahmad, continued its opposition to AQI and Sunni resistance elements. In the southern provinces, Iraqi forces have taken a more assertive role in the security of Basrah City in preparation for the transition of Basrah to PIC in December 2007.

While the GoI’s lack of progress on key legislation has been disappointing and has hindered "top-down" reconciliation, "bottom-up" reconciliation initiatives gained momentum as tribal and local outreach efforts expanded during this quarter. The Council of Representatives (CoR) passed an important pensions law, which has been signed by the Presidency Council, and some legislative progress has been made on the de-Ba’athification law (now known as the Accountability and Justice Law), which received two readings in the CoR. In addition, Iraq and the United States signed a Declaration of Principles for a Long-Term Relations of Cooperation and Friendship Between the Republic of Iraq and the United States of America on November 26, 2007, which establishes a framework for continued bilateral cooperation. Following this, the GoI signed the United Nations Security Council Resolution renewal letter, which is consistent with the road map laid out in the Declaration of Principles.

On the international front, on November 2-3, 2007, Turkey hosted the second Iraq Expanded Neighbors Ministerial Conference, which concluded with a commitment to establish a temporary office in Baghdad to support the Neighbors Process, the reiteration of broad international support for Iraq’s efforts to achieve political reconciliation, support for an expanded United Nations Assistance Mission in Iraq (UNAMI) and recommitment to the International Compact with Iraq (ICI). As part of its expanded mandate, UNAMI has committed to providing technical assistance and personnel to help staff the Neighbors Process support office. Since the last report, Iraq has made progress in implementing the ICI economic initiatives.

The Iraqi economy continues to improve and overcome many challenges to stability and growth. Estimated nominal gross domestic product (GDP) is US$60.9 billion. Real GDP will increase by an estimated 6.3% in 2007 as growth in the non-oil sector continues. The inflation rate has continued to decline due to the Central Bank of Iraq’s tight monetary policy implemented through appreciation of the Iraqi dinar. Year-on-year headline inflation as of October 2007 is 20.4%, which is down from 52.8% one year ago and year-to-date inflation is 4.2%. Iraq has maintained satisfactory performance on its Stand-By Arrangement (SBA) with the International Monetary Fund (IMF) and has a Board date on December 19, 2007 for a new SBA program that is likely to be approved. Crude oil production and oil exports are higher than during the same period in 2006. State-provided electricity outputs for September through November 2007 averaged 107,581 megawatt hours, a 14% increase over production rates for the same period in 2006. Although the GoI will probably not fully execute its capital budget prior to the end of its fiscal year, Iraq has dramatically improved capital spending and, based on August data, has already executed the amount spent 2006. As of this writing, the CoR has held two readings of the draft budget law. Although the budget process is ahead of last year’s timeline, the CoR’s early December recess will delay approval of the budget until after the start of Iraq’s fiscal year on January 1, 2008.

As for development of the GoI’s security forces, the military and police continue to expand in number and improve in capability. Iraq’s basic combat and basic police training facilities continuously operate at or near capacity. As of November 15, 2007, the Coalition and the Ministry of Defense have generated 117 army battalions that are conducting operations at varying levels of capability; another 42 are currently in or planned for force generation. Ten divisions, 34 brigades, and 108 battalions have the lead in counterinsurgency operations in their areas of responsibility. Many elements of the Iraqi Army are now capable of conducting counterinsurgency operations, but most also remain dependent on Coalition enablers. Coalition advisors report steady but inconsistent improvement in the abilities of the Ministry of Defense and the Ministry of Interior to perform key ministerial functions; develop and implement plans and policies; and provide direction and oversight to intelli-gence, personnel management, acquisitions, logistics, communications and budgeting. U.S.-funded programs and advisory efforts continue to improve the capabilities of the Iraqi forces but internal sectarian biases, commissioned and non-commissioned officer shortfalls, logistics deficiencies and a depend-ence on the Coalition for many combat support functions continue to hinder the Iraqi forces’ ability to operate without Coalition assistance.

In summary, tactical and operational momentum has been achieved, and there have been notable overall improvements in the security situation. These improvements, combined with an increase in provincial government expenditure rates, have contrib-uted to improvements in the delivery of essential services and other key programs to the Iraqi people. Cooperation with Iraqi and Coalition forces by tribal leaders—both Sunni and Shi’a—has advanced “bottom-up” reconciliation and assisted in countering extremism. The numerous “tribal awakening” movements and the CLC program are making progress at the local level, but challenges remain at the national level. The key to long-term success will be the GoI’s ability to capitalize upon local gains, pass key legislation and promote national reconciliation.

As far as summaries go, it's a bit long, but I think it paints a fair picture.  Aside from progress on the national stage, one of my other major concerns is the training of Iraqi forces.  The DoD report to Congress has the detailed information, but Bill Roggio has a summary and a helpful graph table.

The most important column is C1/C2, which is quantifies the number of forces that are independent or in the lead.  The more Iraqi troops at C1/C2, the fewer American troops needed, and the more American troops able to go home (or deploy to Afghanistan).

The national government is barely moving forward, and there are still many dangerous areas, but I think we're moving in the right direction, and this isn't to say that things couldn't move backward in the coming months.  Lots of things could go wrong.  Do I think we're winning?  For me, it's still too early to tell.  We'll need more time to see how Iraqis respond to this progress.

Update:  A hat tip as usual to Engram for the graphs.  The civilian casualty figures are based on data from the Iraqi Coalition Casualty Count , which gets its data from independent media reports.  Oh, and I forgot to link to this interview with General Petraeus , the man who should've been Time's man of the year.  Here's what Petraeus sees ahead:

In the year ahead, we'll continue to focus on security for the population, living with those we seek to protect. You can't commute to this fight.

"Over time in the new year, we'll continue to thin our ranks as Iraqi forces take on more tasks. In many provinces, Iraqis already are completely in charge; in some areas, in fact, there are no coalition forces at all.

"The past year also underscored the importance of keeping the pressure on al Qaeda and the other extremists. We'll seek to sustain that this year to prevent them from reconstituting and recovering from their losses.

"We and our Iraqi partners will also continue to look beyond the security realm to help the Iraqis improve basic services, revitalize local markets, repair damaged infrastructure and create conditions that allow displaced families to return to their homes. Local stakeholders are the best insurance against the return of extremists."

On the political situation.

"Iraqi leaders all agree that political progress in Iraq has been insufficient; nonetheless, there have been some steps forward in the past couple of months. While progress on the so-called benchmark legislation has been slow, actions that will flow from those laws are already being taken.

"Particularly noteworthy is the distribution of oil revenues: generally in the way envisioned by the oil-revenue-sharing law - in the absence of agreement on that law.

"We should remember that Iraq's political system is still in its early stages of development. Its leaders are trying both to establish a government in the midst of what is still considerable violence and trying to resolve truly fundamental issues."