The number of civilians killed in Iraq last month more than halved to 359 compared to a year ago, Iraqi government figures showed, and the number of U.S. troops killed in action also fell dramatically.

U.S. combat deaths fell to eight in September, down from 12 last month and vastly reduced from 43 in September last year, statistics from independent Web site www.icasualites.org showed.

Violence in Iraq has fallen to around four-year lows in recent months, but militants have still been capable of large-scale attacks.

Iraqi leaders continue to make incremental but steady political progress. The current security environment is more hospitable to compromise across sectarian and ethnic divides, while expanding oil revenues have generated the funds needed to support development and reconciliation programs. A significant legislative achievement this period was the passage of the $22 billion 2008 budget supplemental bill. Over the last several months, the Council of Representatives (CoR) has shown a greater willingness and capability to address difficult issues. After passing the Budget, Provincial Powers and Amnesty Laws, Iraqi leaders are now focused on implementing these laws. They are doing so with the Sunni political bloc having returned to the cabinet, and with Sunni Ministers and the Sunni Deputy Prime Minister approved by the CoR.

The CoR also passed a new Provincial Elections Law on September 24, 2008, which is currently awaiting approval by the Presidency Council. This legislation allows for open list elections and establishes an elections deadline for January 31, 2008. The passage of this law is a milestone for the Government of Iraq (GoI) and, if approved by the Presidency Council, will accommodate new elections allowing groups that boycotted the 2005 provincial elections to participate in the political process. Depending upon the implementation timeline, elections may still be held in 2008 but are more likely to be held in January 2009.

Growing recognition of the legitimacy and capacity of the GoI has encouraged significant international economic engagement since the last reporting period. Since the May 29, 2008 Ministerial in Stockholm, efforts to advance the goals of the ICI have continued, producing increased visibility and opportunities for trade and greater integration with the global economy. Favorable outcomes from Expanded Neighbors Conferences include the Bulgarian Finance Ministry’s acceptance of a final settlement of $360 million for Iraq’s Saddamera debts and its agreement to write off the remaining $1.5 billion debt. Similarly, Jordan signed a debt rescheduling agreement and is preparing to restore broader economic ties. The UAE cancelled nearly $7 billion in Iraqi debt, and Oman is preparing to restore broader economic ties.

During this period, Iraq participated in important diplomatic engagements with its neighbors. Turkey’s Prime Minister Erdogan met with Prime Minister Maliki in Baghdad in July 2008, marking the first visit to Iraq by a Turkish Prime Minister in 18 years. The Prime Ministers signed a Supreme Strategic Cooperation Convention which sets the framework for increased political, security, economic, and cultural cooperation. In August 2008, His Royal Highness King Abdullah of Jordan flew to Iraq and met with senior GoI leaders. This marked the first visit of an Arab head of state to Iraq since 2003. Other visits by high-level leaders include those of UAE Foreign Minister Abdullah bin Zayid, Lebanese Prime Minister Siniora, and Lebanese parliamentary bloc leader Sa’ad Hariri. In addition, Jordan, Bahrain, and the UAE have formally named ambassadors to Iraq. Kuwait has also named an ambassador to Iraq, ending a two-decade old diplomatic rift. Egypt and Qatar have announced their intention to identify and send ambassadors.

For the first time since Rasmussen Reports began polling on the issue, a plurality of voters in September say the U.S. mission in Iraq will be viewed as a success in the long term.