Washington's thinking was consistent with London's on this matter, he stressed.

"We will not leave until the job is done," Reid told reporters at a London briefing.

"The job will be done when we can hand over to the Iraqi security forces the protection from terrorists of their own democracy.

"That is a process that could well begin in areas of Iraq in the course of the next year."

Reid's comments are one of the strongest indications yet of the British government's eagerness to begin bringing troops home from the conflict-ridden country as soon as possible.

Withdrawal from Iraq is the subject of mounting public debate in Britain, with pressure increasing on the government to signal they will not remain in the country indefinitely.

However, ministers are keen to avoid setting a specific date to begin a pullout, arguing that insurgents would then simply wait until forces had withdrawn to continue their campaign.

Reid previously eyed May as a possible date to begin the handover, but later modified his comments, insisting there was no "timetable" for withdrawal.

In his latest remarks, he emphasized that the security handover would be "a process, not an event."

Reid said 85 percent of terrorist activity was confined to four provinces -- Baghdad, Anbar, Nineveh and Saladin.

Fourteen of the 18 provinces were "relatively peaceful ... and relatively well-governed," he said, while attacks in British-controlled areas accounted for just 2 percent of the violence.

The overall picture in political, economic and security terms was one of progress, albeit "slower than it ought to be" because of the efforts of terrorists, he said.

Within the Iraqi security forces there was a new resolve, confidence and commitment to fight and beat terrorism "which wasn't there, quite frankly, a year ago," he said.

Democracy was proceeding, he said, acknowledging that the terrorists were getting more "frenetic" as it did so.

The coming national elections in Iraq, on Dec. 15, would be "hugely important," Reid said.

But as voting approached, "we can expect the terrorists to get even more desperate to wreck the process," he added.

The defense secretary also acknowledged that there were still significant problems with militia infiltration and split loyalties in the Iraqi police force.

"Policing in Iraq, although it is increasing in its respect for human rights and objectivity, is by no means perfect," he said.

He had made his views known "in no uncertain terms" on the allegations of abuse at the hands of Iraqi security forces, he continued..

Reid said he had met with the Iraqi minister of the interior, Bayan Jabr Solagh, during his trip to the country last week, and made it "absolutely clear" that there should be no tolerance of the practices of the previous regime.

"Any inquiry into prisoners who have been discovered in Iraq, allegedly maltreated, any inquiry must be speedy, open, comprehensive and transparent," he said.

"Bad things" would still happen in Iraq, he said, given the legacy of Saddam's regime and the ongoing fight against terrorism. However, the difference now was that such practices would be exposed and dealt with transparently, and the perpetrators prosecuted.

Around 12 members of the Iraqi police had been arrested by British troops in the past few months, he noted, while the department for internal affairs in Basra, southern Iraq, had been dissolved.

Britain was dispatching Sir Ronnie Flannigan, former head of the Royal Ulster Constabulary, to advise Iraqi police chiefs, he said.

Reid said the British government was pleased with U.S. President George W. Bush's comments on the need to bring opponents of the U.S.-led coalition into the political process in his speech on Iraq last week.

The president had broadly concurred with Britain's view that insurgents in Iraq could be divided into three categories, he said: imported foreign fighters, "irreconcilable" internal terrorists from the former Baath regime, and others who had taken to violence because they were disempowered, unemployed, frustrated or alienated.

"We have to combine the iron fist of military power against those who would use indiscriminate violence, but at the same time put out the hand of political possibility and potential to those who want to change things in Iraq by political means, and that includes the Sunni minority."

He added: "The strength of the democracy will be markedly advanced if the majority reaches out to include in its thinking and its process the minority."

Likewise the government was "delighted" with his comments on handing over control to Iraqi security forces once they were fully capable.

"We're as close to our American colleagues in our thinking as we ever have been," Reid said.

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