Can Petraeus Salvage Iraq?

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Lieutenant General David Petraeus has just returned to his office in Baghdad's Republican Palace from visiting a close friend — a tribal sheikh he had come to know well during his 10-month command of the 101st Airborne Division in the northern city of Mosul. As is often the case, Petraeus is one lucky man: His friend, Sheikh Ghazi Yawar, was appointed as Iraq's new president three weeks ago. And Yawar's most critical priority is the one Petraeus is now charged with overseeing: getting Iraq's military and police forces up and running. "It was wonderful to see him," gushes the 51-year-old general about his friend from Mosul. Another key relationship could be about to pay off big.

Petraeus will need all the friends he can garner once Iraq's sovereignty is transferred to Yawar's government on July 1. Barely three months after Petraeus returned home to Cornwall, N.Y. after a year's command in Iraq, President Bush sent the general back to Baghdad in late April to help salvage a mission that was turning into a mounting political disaster for Washington. Petraeus's brief visit had been billed as an "assessment" of the Iraqi forces. But its mission was far more serious. Weeks of all-out armed revolt in Fallujah and the Shiite southern cities of Najaf and Karbala had left hundreds dead, and made key towns virtual no-go areas for both U.S. soldiers and the fledgling Iraqi forces. Worse, time was running out. U.S. officials had made the June 30 date for transferring sovereign authority an inviolable deadline. The terms on which U.S. forces would operate in the country after the hand-over were unclear, but they had been forced to fill gaps across the country as Iraqi policemen and soldiers had fled their posts during the Spring offensive. And that had forced the Pentagon to extend the deployment of thousands of exhausted American soldiers for an extra three months.

Within weeks of that visit, Petraeus was back again, this time with a clear mandate to stay as long as it takes to fix the under-equipped, underpaid, and demoralized Iraqi security forces. "The President told me I could have anything I wanted, and I took him at his word," Petraeus told TIME during an hour-long interview this week in his office. As an economist with a doctorate from Princeton, Petraeus knew what he needed: Money, lots of it, and fast. During 14 months of occupation, U.S. forces had made several attempts to kick-start Iraq's military. Many had faltered over financial issues: At one stage last year, hundreds of new military recruits went AWOL after learning that their monthly pay was well below that of regular police officers. Others quit after determining that there was barely a corner of Iraq in which they were not prime targets for assassination — and that they were a lot more poorly equipped than their foes.

The change has already been felt. Shortly after Petraeus's arrival, units of the new Iraqi Civil Defense Corps and beleaguered police stations have suddenly received shipments of new weapons and vehicles. Last week, Petraeus dispatched thousands of rounds of ammunition and hundreds of bullet-proof jackets to the Najaf police station — whose officers recently fled in terror from the Shiite militia of the Mehdi Army. With only 287 American police advisors in Iraq, the training for the country's critical new force is still patchy. That will finally catch up, says Petraeus. Meanwhile, gleaming new weapons and ceramic-plated vests will boost the officers' morale. This time around, Petraeus is also using a cherished principle from his other alma mater, West Point: Stand by your fellow soldiers, no matter what. "They have to feel they are not going to be hung out to dry," he says of the new Iraqi forces. "Early on we are going to have to keep on enabling Iraqi forces and backing them up when necessary, even when we are building from the top."

It's not hard to see why President Bush may chosen Petraeus as the commander to turn things around on the Iraq security front. The general had emerged from the tumultuous first year of occupation with a reputation as perhaps the finest American commander in Iraq, capable of making important Iraqi friendships in one of the country's most hostile regions, as well as maintaining fierce loyalty among his soldiers. His strongest asset could be his bubbling enthusiasm, in a country battered by 14 months' violence. Flush with good health, Petraeus has the air of someone who has just come in from a bracing walk in the fresh air. In fact, famously fanatical about his exercise routine, he runs between meetings around the fortified "Green Zone," in sweltering heat well above 100 degrees, clutching a bottle of water. "It's pretty hard to keep up," says a young soldier who escorts TIME out of the palace, and who had jogged with Petraeus the previous day.

It is his performance as an executive that seems to win most praise, however. "The man is brilliant," says one political aide in Baghdad. "He decided early on he had to go beyond the book." Chafing at the Pentagon's penny-pinching bureaucracy, Petraeus — whose Princeton thesis was entitled "The American military and the Lessons of Vietnam" —opted early on in the occupation to spend every cent of his discretionary budget on community projects around Mosul. Minutes into TIME's interview this week, he can scarcely wait to report that the defunct asphalt factory in Mosul which he reopened last year is now producing 200 tons a day. "There are trees falling in the forest and no one is hearing them," he says. "Of course we all do hear what blows up in Baghdad."

A car bomb outside an Iraqi army recruiting center in Baghdad Thursday killed at least 35 people, and served as a sobering reminder of the obstacles confronting Petraeus. Iraq's forces still remain high-profile, relatively soft target in most parts of the country. And although a deal has been brokered with a number of political parties to dissolve their militia and integrate them into the new military, Petraeus has hit the wall with the fiercest militia of all: the Mehdi Army of the radical Shiite cleric Moqtada Sadr. "The truth is, I think the Iraqi political leaders are going to have to determine the way ahead on that one," he says.

There is still no knowing how American soldiers will operate once they no longer run this country less than two weeks from now. Nor do we know whether Iraq's new policemen and soldiers will remain loyal to the U.S.-friendly government, or choose to switch sides if Iraq slips into ethnic violence. Asked how he plans to forge the new security forces in the midst of Iraq's upheaval, Petraeus says: "Patiently, over time, by fostering lots of dialogue." That dialogue is at least something in which Petraeus — talkative, charming and sociable — is likely to shine.