Bush and Blair admit that Iraq presents 'immense challenge'

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Tony Blair and George Bush last night hailed the arrival of a new Government in Baghdad as "a new beginning" but warned that an "immense challenge" remained. Only when Iraq was fully able to defend itself would US and British troops be fully withdrawn, both leaders made clear.

At a joint press conference last night, both the US President and the Prime Minister admitted that there had been "setbacks and mis-steps" in the conduct of the war. But both inisted that the decision to remove Saddam Hussein had been right, and the task now was to make sure that the new government of Nouri al-Maliki was a success. "Our coalition will seize this momentum," Mr Bush vowed.

"I came away thinking the challenge is still immense," Mr Blair said, referring to his visit to Baghdad last Monday. "After three years which have been very, very difficult it is our duty to get behind the government and support it." No Iraqi politician he spoke to wanted a "precipitous" withdrawal of coalition forces, he said.

Mr Bush added: "Politics won't make the decision, conditions on the ground will." The meeting of the President and his closest ally comes at a moment when their domestic popularity has hit all time lows ­ 26 per cent in the case of Mr Blair ­ primarily because of the three-year-old war, the end of which is not in sight, with the origins shrouded in controversy.

It is Mr Blair's eighth visit to Washington since 9/11 ­ and possibly his last to a country where he is far more popular than at home. If the Prime Minister stands to gain nothing from being seen with Mr Bush, for the President, the opposite is true.

"The war has affected mentality of the country," Mr Bush acknowledged, with polls showing his approval rating down to barely 30 per cent. "American people need to know we are making progress."

For that reason, Washington, as well as London, is desperately hoping that Mr Maliki can make good on his target of taking full responsibility for security by the end of 2007. As for Mr Blair and his domestic political difficulties: "Don't count him out," Mr Bush added, to laughter.

Currently, some 132,000 US troops are in Iraq, and the Pentagon is hoping to reduce this figure to no more than 100,000 by the end of the year. British forces number 8,000. But in both countries demands are growing for a faster withdrawal. Even in the US, where support for the war has always been higher than in Britain, Americans now believe, by a 59-40 margin, that the 2003 invasion was a mistake.

After the press conference, the two leaders were holding a private dinner at the White House. A major topic was Iran, where Britain is as adamant as the US that Tehran must not be allowed to acquire nuclear weapons.

"We trying to convince Iran this coalition is serious," Mr Bush told reporters, referring to moves to block Iran's uranium enrichment programme.

"If they want an enhanced package, they have to suspend their operations. Then we'll look at all the options.

"But they're the ones that walked away from the table," the President added, dismissing suggestions that he was rejecting direct talks with Tehran. The will of the international community was clear, Mr Blair added.

First, however, the major powers must work out a package of incentives and possible sanctions on Iran acceptable to all five permanent members of the Security Council, including Russia and China. In London this week senior officials from the P-5 countries reportedly made progress, but failed to reach a deal.

Today, after a breakfast meeting with Congressional leaders, Mr Blair delivers a speech at Georgetown University on his vision of world governance, before returning to the White House for lunch with Mr Bush.

The speech will call for a global order based on moral values, underpinned by reformed and strengthened international institutions, including the United Nations, the IMF and the World Bank.

Mr Bush and Mr Blair will discuss possible choices of a successor to Kofi Annan, the UN Secretary General whose term ends soon. But a laughing Mr Blair denied his speech would be a "job application" for the post.