Secretary of State for Defence John Reid gave a speech to the Foreign Press Association (FPA), London on Monday 20 March 2006, in which he outlined what he believes is the progress being made in Iraq.

Speaking to the gathered audience of FPA members and correspondents, Mr Reid identified examples of development in security, civic society and the economy while also issuing a call for national unity in Iraq.

Mr Reid said:

"I have just returned from Iraq and thought tonight would be a good chance to lay out my thoughts and observations based on intensive discussions in the last three days and our experience over the last three years. I want to cover politics, security and economy and civil society, but let me just say this in way of summary.

"The situation in Iraq is serious but it is not terminal. There has been an increase in sectarian violence but it is not civil war. Despite the worst efforts of the terrorists there has been significant progress by the Iraqis in building their democracy and democratic government, their own security forces to defend that democracy and the beginning of economic revival.

"Of course, there have been cruel and barbaric terrorist attacks in an attempt to destroy progress in all their areas and to provoke a civil war between Shia and Sunni. It is to the credit of all politicians and religious leaders in Iraq that throughout three years of these attempts they have refused to do what the terrorists wanted. It is now crucial that they respond to the terrorists to divide them by uniting, in the speedy formation of a strong, representative government of national unity, bringing together all of the democratic politicians, all of the talents, all of the ethnic groups, and all of the denominations. In short all of the people of Iraq against the terrorist enemy.

"That would be the strongest response to the terrorist who seek division the strongest signal to the international community who seek progress and the strongest reassurance to the overwhelming majority of the people of Iraq who want peace and stability.

Meetings

"Over the past few days some of the people I have met include; President Talibani, Prime Minister Ja'afari, Vice President Abdul Adel Mehdi, Defence Minister Sa'adoun Al-Dulaimi, Foreign minister Hoshyar Zebari, Planning minister Barham Saleh, Minister of the Interior Bayan Jabr, Massound Barzani, ex Prime Minister Ayad Allawi, and the leader of SCIRI Abdul Aziz Al-Hakim. The American ambassador Zalmay Khalizad the Commander of coalition forces General George Casey his deputy General Rob Fry and the commander of the training mission General Dempsey.

"And down south I met Commander of MND SE General John Cooper. I visited Al-Muthanna Province and met with the Iraqi Brigade commander and the Deputy Chief of Police, an Australian training commander Lt Colonel Sean O'Leary and the Japanese Colonel Onadera. On my way back I also discussed the situation with His Highness the PM of Kuwait and the Deputy Prime Minister and Defence Minister of Kuwait. I could also tell you the names of all of the delightful Iraqi dishes I have eaten but we would be here all day.

"I'd like to give a quick outline on where I think things stand in politics, security and economic development and finish with where that leaves our troops and our commitment before taking questions. So where do we stand this week?

"Let's look at politics and political cohesion. My assessment is that despite the rise in sectarian killings since the Samarra shrine attack there is not a civil war in Iraq. It is not imminent and there is certainly nothing inevitable about a slide towards civil war. The violence does not have a national geographic spread and its nature is not a general uprising by citizens. The main risk of civil war, if there is such a risk, is that Iraq unravels from the top down. And based on my contacts with all the senior political figures I do not believe this likely.

"There is and has been for some time – a systematic attempt by the terrorists to provoke civil war. And there has been a rise in sectarian violence. But the Iraqi leadership of today does not have Saddam's evil tactics of pitting brother against brother, family against family and the systematic disintegration of Iraqi society. That was a civil war. Think of the genocide of the Marsh Arabs or the use of chemical weapons against the Kurdish population. That was a civil war.

"The vast majority of the people of Iraq, alongside the whole international community supported by a UN mandate, are willing the democratically elected politicians to succeed. We all want to see a properly constructed government of national unity formed as soon as possible. It would be the best way to defuse sectarian tension, deliver legitimate security and defeat the terrorists.

"And although I return from Iraq deeply saddened by the recent wave of death and destruction, I am heartened - not just because of the morale of our troops, and also because I witnessed what I believe is the potential emergence of an enduring political solution. The current level of violence has grown up in the aftermath of a calculated act of barbarism in the bombing of the shrine in Samarra. The violence orchestrated by terrorists in the aftermath is fuelled by the vacuum of a stalled political process. As I met and talked to all the key players and experienced first hand their understanding of this point - and saw in their eyes and in their words a commitment to deliver a competent government of national unity.

"Jack Straw and I believe from both our visits that a blueprint is emerging. I believe that a balanced political solution is emerging from detailed and serious discussion. The key features are these:

That whoever becomes the incoming prime minister they will consult and work through collective cabinet government.

A commitment on all sides that new ministers must be non sectarian and competent, especially in crucial and sensitive departments.

That the government of national unity shall work to and deliver an agreed programme for at least the first two years – focussed on the priorities of the country - security and economic development.

"Terrorists love a political vacuum. So the formation of a Government of National Unity is today more urgent than ever. One priority task must be to deal with the militias. So there is progress but not perfection on the political front which I believe this also is a fair summary of the position in terms of security and economic development.

Security development

"Yesterday I visited the 2nd Battalion of 10th Division of the Iraqi Army in Samawah in Al-Muthanna province. I saw recruits being put through their paces in their newly built barracks by their officers, under the dutiful eye of the Australian army who are playing a key role in training them. This is an international effort under the UN, with the Coalition troops backed by a NATO training mission and the EU that are helping develop the Iraqi judicial system.

"The Iraqi soldiers that I met told me of their enthusiasm and commitment – something evidenced in security operations undertaken by other Iraqi Battalions north of Baghdad this very weekend. Now around 60 battalions of the 110 battalions in the Iraqi army are regularly taking the lead in operations or operate independently. Some shortfalls remain and there is much to do – but in the south we are on track to complete our training mission to plan.

"I witnessed myself one such operation at a vehicle check point outside Samawah where the Iraqi army was providing the security for pilgrims driving north to Najaf for the Imam Hussein Arba'een festival. The line of coaches and cars decked out in colourful flags, crammed with people showing a common purpose of pilgrimage, with just a little of the M4 morning rush thrown in.

"Remember that 14 out of the 18 provinces in Iraq are relatively calm with about only 2-3% of incidents taking place in our area in the south. The Iraqi army now has around 240,000 troops trained and equipped. Yet security challenges remain – sectarian killings are increasing and there are problems remain with the police – where mixed loyalties persist. Any incorporation of individuals belonging to militia into the security forces must be done on the government's terms. There must be no place in the new Iraq for armed gangs usurping the use of force in order to create no go areas.

"In some areas the Iraqis are on the way to being able to take control of whole provinces. In other areas, as I have always said, this will take time. But the time is now right to start the assessment of whether the transition to Iraqi lead in some provinces can take place. I believe that process will and should start next month.

Economy and civic society

"On the economic front parts of the Iraqi economy are booming. It's clear to me now what Iraqi army wages are spent on. Camera phones. I don’t know what some of the recruits' families will make of having their sons' picture with me sent them on the latest technology but they certainly seemed keen to take them. And it's not just mobiles that are booming. Consumer goods are also increasing fridges and air-conditioning in particular are popular. And there is a voracious demand for the new free media.

"Here in front of me are your microphones. When I met President Talibani on Saturday and gave a press conference there were so many competing Iraqi TV channels there that they had their microphones banked three high – and because of commercial competition they all had their logos prominently on display. Now because the President is so keen on a free media, rather than ask them to remove a few, his staff placed a paving stone on the ground behind the lecturn so he – along with the free media’s logos - could both be seen as well as heard.

"The government have started to take moves towards a market rather than command economy although this is a difficult process. The currency is stable. International debt has been lifted. 75 hospitals are now operating, 3400 schools are rehabilitated and millions of children immunised. Petrol pump prices have been deliberately increased so fuel is becoming a commodity rather than a state benefit as it was under Saddam.

"And I discussed with Japanese troops their government's plans for a new power plant near Al Sammawah – because increased demand is still outstripping increased supply. And water, the bringer of life in the desert, is more easily available – certainly in our section of southern Iraq where Hilary Benn our Internatonal development Secretary is today opening a water engineering college to supply Iraq with its own means of supply of water engineers of the future. But there is still a long long way to go. Iraqis remain frustrated about limited and interrupted electricity supply. Oil is still being lost and corruption a way of life. So where does this leave our troops and our commitment?

"Last week I was able to announce we will reduce troop numbers by 800 in the next changeover simply because of the increasing capability of the Iraqi troops and because we are completing some tasks like training the trainers. Around 7000 remain to see the mission through. We will stay in Iraq until the job is done. We will not cut and run. We will stay in Iraq as long as the Iraqis need and want us to but not a moment longer. Our aim is to help the Iraqi people create a functioning democracy with the security to defend it while rebuilding their economy.

"This success strategy is the exit strategy. Whatever my political opponents here in the UK, like Menzies Campbell and David Cameron call it, we along with international community under the UN and the vast majority of the Iraqi people share the same objectives on Iraq. And it is a policy we have been pursuing remorselessly for three years. The terrorists know the strategy and are currently seeking to provoke civil war to destroy it.

"As the terrorists become more desperate we must remain resolute. The Iraqi people, their politicians and their security forces are showing great fortitude, courage and restraint in the face of terrible atrocities designed to provoke. We best support them with our endurance. It is easy to stay committed in easy times but real value, real friendship and real solidarity comes at the difficult times. Now is one of those moments."