Given the fact that the total number of attacks are up and Iraqi casualties are rising, it is real hard to say we have seen any light in this tunnel.

The first was the creation of an Iraqi security capability, which we have well underway -- a quarter of a million (Iraqi personnel) doing various things. And number two was a functioning unity government, or something that at least had all the major groups represented. We now have that.

I think it's just too early to tell how much a problem they have and whether they've actually turned the corner.

I am enormously skeptical that the Serbs are ready to negotiate, or more importantly, the Serbs that we are talking about here are the Serbs of Belgrade. (Bosnian Serb leader Slobodan) Milosevic, we have not heard from because the administration refused to directly negotiate with the Bosnian Serbs.

They do not want to be out there in front if the United States is in the process of withdrawal. They can't be the last ones left standing in Iraq.

It's like having a persistent drought. At some point when you have drought conditions you have to institute water rationing, and that's what you potentially face in the military if it goes on long enough. You would get to a stage where you don't have enough people to staff your organizations.