Baghdad ? On Dec. 13, Gen. David Petraeus addressed a gathering of hundreds of Sunni sheikhs in flowing robes – including some who were attacking his soldiers around the capital not long ago.

This is the new Baghdad, where security has improved as tens of thousands of former Sunni insurgents have recently turned against al-Qaida in Iraq (AQI) and smashed it with U.S. help. Many of these Sunnis are now on the U.S. payroll. But no one is certain whether these security gains will hold after the extra U.S. “surge” troops are withdrawn as scheduled by next July, or whether Iraq will slip back into brutal sectarian warfare.

So I asked Petraeus in an interview how he assessed the current situation and the post-surge future. We spoke in his Baghdad office, in Saddam’s garish former palace with its marble floors (and marble bathrooms) and grandiose reception rooms now housing a warren of U.S. government offices.

“I think it is going the way we wanted in Baghdad and the belts around Baghdad,” he replied. “We have done considerable damage to al-Qaida in Iraq. Anbar is transformed,” he added referring to the Sunni province once home to the toughest insurgents and a base for AQI.

Confident but wary

Then he paused. “Tenuous is the right word to describe the situation,” he said, “and you won’t find any military commanders doing victory dances in the end zone. We are all guarded in our assessments, with a great deal of wariness about the what-might-be’s.”

Petraeus is right to be both confident and wary.

The security progress of recent months results largely from a new military and political strategy that reverses the haphazard, incoherent U.S. Iraq policies of the past four tragic years.

Back in October 2003, when I first met Petraeus as commander of the 101st Airborne based in the northern Iraqi city of Mosul, he was implementing a counter-insurgency strategy with this central principle: Winning over local Sunni tribal leaders was a higher priority than military action. The sheikhs were given economic aid and jobs to get the economy restarted, and their men were hired into a new local security force.

But, back then, there was no coherent U.S. political military strategy for the whole of Iraq. In Anbar province, the Sunni heartland, the U.S. focus was on military attacks, and tribal leaders were treated crudely and brusquely; in fall 2003, I heard several complain bitterly when I visited Anbar. They soon became supporters of the insurgency and AQI.

Now Petraeus has made a new army counterinsurgency doctrine the basis of the military approach in Iraq – a doctrine that stresses flexibility and winning the support of local people. He says that U.S. commanders and troopers “get it,” that “we are finally seeing the cumulative impact of changes in our (new counterintelligence) manual. Mission rehearsals in California used to (simulate) mechanized forces colliding in the Mojave desert.” But now the exercises simulate the challenge of dealing with Iraqi villagers and townsmen, with “thousands of Iraqi speakers playing roles.”

We can now see the new doctrine in action. When tribal leaders in Anbar turned against AQI because it had started persecuting local Sunnis, and when these sheikhs asked for American backing, an army commander in Anbar took a chance and agreed to support them. (In 2006, U.S. commanders rebuffed similar requests.) Now the U.S. support has become massive.

Anbar a ‘dramatic shift’

Petraeus credits the Anbar movement, known as “the Anbar awakening,” with creating a “dramatic shift. There was a critical mass of popular opposition to al-Qaida in Anbar, and it rippled down the Euphrates Valley and around Baghdad.” Now tribesmen do most of the policing in Anbar, and there are about 70,000 tribal fighters assisting U.S. forces in Baghdad and elsewhere.

But the general recognizes the fear of the Shiite-led government that these groups could morph into violent Sunni militias, or be infiltrated by members of al-Qaida. “You work very hard to get them transitioned into the Iraqi police,” he says. For the large numbers who don’t qualify, “we’re developing a lot of programs, a civil service corps.” U.S. funds will pay for this Sunni job corps at first, but the Iraqi government has pledged around $150 million to match the U.S. funding.

Petraeus says the program “saves double the cost per month in the number of U.S. military vehicles not lost to insurgents, not to mention the lives.” He is also trying to win Sunni hearts and minds by hastening the release of thousands of Sunnis detained in U.S. prisons.

But to co-opt the insurgency, and prevent renewed fighting, there must be progress at political levels. The whole purpose of the surge was to open a window of space and time that would permit sectarian Iraqi leaders to reconcile and help heal the country. That scenario would enable sizable American troop withdrawals. But Iraqi political leaders have yet to oblige.

Petraeus says, with excess generosity, “the political piece is sputtering along. None of this is smooth.”

But he adds that, though top political leaders haven’t passed “benchmark” laws, “there is reconciliation in many provinces in a way not yet reflected at the top.” One hope is that the Anbar Awakening may morph into new, nonsectarian political groupings more willing to deal with Shiite leaders than the current Sunni political parties.

Sunnis must be integrated

Petraeus recognizes that unless Sunnis feel integrated into the political system the current security progress could unravel. Another wild card is the radical Shiite militia of Muqtada al-Sadr – which once drilled holes in heads of Sunni civilians but has been observing a cease-fire. The general thinks the cease-fire will hold, because Sadr’s movement is clearly “aware of the damage done to its reputation” by attacks on fellow Shiites, criminal behavior and extortion.

I asked Petraeus how the scheduled drawdown of “surge” troops – about 22,000 – would affect the security gains. After all, AQI retains strength in the north and could try a comeback. “We have to maintain the pressure on al-Qaida,” he said. But he believed this could be done without adverse affects by “thinning out” U.S. units “while thickening with local forces” like the new Sunni paramilitary, and better-trained Iraqi units.

Will the U.S. troop levels fall lower next year, and do we want permanent bases? Petraeus, who’ll return to testify before Congress in March, would not answer on the record. But Iraq’s national security adviser, Mowaffaq al-Rubaie, said recently that Iraq would never permit permanent bases, and the White House said it didn’t want them. (The word permanent remains undefined.)

Agreement may be coming

My impression from my trip is that the military agrees. The United States will be signing a security agreement with Iraq during the coming year. Ideally, the military would like to ramp troop levels down and hand off most responsibility for counterinsurgency to Iraqi troops. U.S. troops would then have a very different mission, focusing on training and security assistance.

But Petraeus’ caution is well founded. No one can clearly foresee what will develop in current months because the variables are so many and each affects the other. Yet there are now possibilities for positive change that didn’t exist six months ago.