WASHINGTON, March 2 (Reuters) – President Barack Obama’s vow to withdraw all U.S. combat troops from Iraq by the end of August will be tested this weekend as millions of Iraqis head to the polls to elect a new government. While the United States has faced many critical junctures during the seven-year-old Iraq war, arguably the stakes have never been higher than they are now. If the election goes well, U.S. soldiers can go home on schedule. But, if it triggers a repeat of the sectarian bloodletting that killed tens of thousands of Iraqis in 2006-2007, Obama may be forced to rethink his timetable. An eruption of violence that threatens Iraq’s stability would also be an unwelcome distraction for Obama, who has declared that bringing down the United States’ stubbornly high unemployment rate will be his top priority this year. He left himself little wiggle room in his State of the Union address to the American people in January. "We will have all of our combat troops out of Iraq by the end of this August," he said. "Make no mistake: this war is ending, and all of our troops are coming home." Obama campaigned on a promise to bring a swift end to a war that has claimed the lives of more than 4,300 U.S. soldiers and drained the U.S. Treasury of hundreds of billions of dollars. With an economy only starting to recover from recession and a deteriorating security situation in Afghanistan, the Iraq war has not been a top priority for Obama, although he has appointed his vice president, Joe Biden, to manage it. OBAMA’S DILEMMA Now, however, Obama has arrived at his moment of truth. The dilemma he faces is what happens if Iraq’s political leaders remain deadlocked for months on who should form a new government and spoilers try to take advantage of any power vacuum, as al Qaeda did after the 2005 election, sparking a wave of sectarian bloodletting. "The concern is that that period is potentially perilous," said a senior administration official, speaking on condition of anonymity. "If there is any sense of a vacuum, who is in charge, one is always worried about how that vacuum is filled. But, the administration is heartened by the fact that "as messy as things are, Iraqis, at least for now, have made a fundamental choice to resolve their differences through the political process, not bombs and bullets," he said. The top U.S. commander in Iraq, Gen. Ray Odierno, says he has made contingency plans to slow the withdrawal of troops from Iraq, but Defense Secretary Robert Gates stressed there would have to be a "considerable deterioration" of the security situation first. "It would have to be a cataclysmic scenario of the sort that most Iraq watchers don’t think will occur, which means something of the sort of a return to the violence we saw in 2006," said Brian Katulis, an Iraq expert at the Center for American Progress think-tank. Odierno says he still expects to reduce U.S. troop levels in Iraq to 50,000 by the end of August, from about 96,000 now. There is little appetite in the Democratic-controlled U.S. Congress for delaying the pullout, particularly in an election year in which Democrats face a tough battle to hold on to their majorities in the Senate and House of Representatives. "I find no support among my colleagues for anything other than continuing apace with the withdrawal," said Democratic congressman William Delahunt, a senior member of the House of Representatives Foreign Affairs Committee. "We’ve been there, and it’s time for the Iraqi people to make their own decisions," he told Reuters in an interview. NO FAVORITES Washington would like to see a new government formed as quickly as possible, but officials acknowledge that it may be weeks if not months before a new parliament is seated, a prime minister chosen and his cabinet approved. The U.S. official said Washington had no favorites in the race, but Katulis said victory by the Iraqi National Alliance, a mainly Shi’ite alliance that includes parties with links to Iran, would pose a problem for the United States. Washington wants a stable, friendly government in place as it withdraws its remaining troops by the end of 2011, one that can also finally make headway on potentially explosive issues such as the future of the disputed oil-rich city of Kirkuk. There is also speculation that Washington and Baghdad may revisit the security agreements they signed in 2008 to keep on a number of U.S soldiers in Iraq after 2011 as trainers. "When you are selling a country sophisticated hardware and deeply embedded with their military, it is more than likely that whoever comes into office … is going to ask us to stay," said Brett McGurk, a former Bush administration official who helped negotiate a new U.S.-Iraqi security pact in 2008. While Obama wants to wind up the Iraq war as quickly as possible, he doesn’t want to leave the country in a mess. After investing so much blood and treasure in Iraq, the United States — even under a president who opposed the war when he was a U.S. senator — wants to be able to hold up Iraq as a success story and say it was not all in vain. That was underscored by Biden in an interview last month. "I am very optimistic about Iraq. I mean, this could be one of the great achievements of this administration," he said. (Additional reporting by Susan Cornwell; Editing by Patricia Wilson and Eric Walsh)

WASHINGTON (Reuters) – U.S.-led forces in Afghanistan will launch a new military operation later this year to get full control of Kandahar, the former “capital city” of the Taliban, a senior U.S. official said on Friday.

The top U.S. general in Afghanistan, General Stanley McChrystal, had already flagged his intention to target Kandahar following an offensive, now in its third week, to retake control of the Taliban stronghold of Marjah in neighboring Helmand province.

“If our overall goal for 2010 in Afghanistan is to reverse the momentum (of the Taliban) … then we think we’ve got to get to Kandahar this year,” said the senior Obama administration official, speaking on condition of anonymity.

Militants have over the past year made startling gains in the area around Kandahar, the birthplace of the Taliban movement. Reclusive Taliban leader Mullah Omar ruled Afghanistan from there before U.S.-led forces invaded in 2001.

McChrystal described the city in his assessment of the war last August as the “key geographic objective” of the Quetta Shura Taliban, the main faction led by Mullah Omar.

The U.S. official was offering an assessment of the offensive in Marjah, which the administration views as key preparation for the potentially bigger battle of Kandahar, Afghanistan’s second-largest city.

TEST CASE FOR BIG PRIZE

WASHINGTON, Feb 26 (Reuters) – U.S.-led forces in Afghanistan will launch a new military operation later this year to get full control of Kandahar, the former "capital city" of the Taliban, a senior U.S. official said on Friday. The top U.S. general in Afghanistan, General Stanley McChrystal, had already flagged his intention to target Kandahar following an offensive, now in its third week, to retake control of the Taliban stronghold of Marjah in neighboring Helmand province."If our overall goal for 2010 in Afghanistan is to reverse the momentum (of the Taliban) … then we think we’ve got to get to Kandahar this year," said the senior Obama administration official, speaking on condition of anonymity. Militants have over the past year made startling gains in the area around Kandahar, the birthplace of the Taliban movement. Reclusive Taliban leader Mullah Omar ruled Afghanistan from there before U.S.-led forces invaded in 2001. McChrystal described the city in his assessment of the war last August as the "key geographic objective" of the Quetta Shura Taliban, the main faction led by Mullah Omar. The U.S. official was offering an assessment of the offensive in Marjah, which the administration views as key preparation for the potentially bigger battle of Kandahar, Afghanistan’s second-largest city. TEST CASE FOR BIG PRIZE Marjah is one of the biggest operations in the more than eight-year-old Afghan war. It is also an early test of President Barack Obama’s plan to add 30,000 more troops to win control of Taliban strongholds and eventually transfer them to Afghan authority. "The way to look at Marjah is that it is the tactical prelude to larger more comprehensive operations later this year in Kandahar city," the administration official said. "Bringing comprehensive population security to Kandahar city is really the centerpiece of operations this year and therefore Marjah is the prelude," he said. The British commander of NATO forces in southern Afghanistan said last week that NATO forces would sweep toward Kandahar over the next six months. On Thursday, Afghan authorities raised the Afghan flag over Marjah to signify the handover of control to the government from NATO troops led by U.S. Marines. The official said military commanders on the ground believed it would take several weeks yet to clear the remaining pockets of resistance in and around Marjah."We are somewhere between clear and hold and that is pretty much on track. What is going to be more challenging than the clearing process will be the building process," he said. He acknowledged U.S. and Afghan security forces would not initially have the trust of Marjah’s residents. "It is not so much a matter of a physical contest about who controls the weapons, it’s a question of who controls the confidence of the people. That will only come after we are able to deliver," he said. Washington hopes its latest offensive will decisively turn the momentum in a war that commanders say has been going the way of the Taliban. Under Obama’s new strategy, NATO and Afghan security forces are to secure population centers across Afghanistan so that the government can move in. (Additional reporting by Caren Bohan and Adam Entous)

WASHINGTON, Feb 20 (Reuters) – The White House will unveil its latest healthcare reform proposals on Monday ahead of a bipartisan summit that President Barack Obama hopes will advance the stalled legislation, a senior administration official said on Saturday.

Obama urged Democrats and Republicans on Saturday to find common ground at a summit he will host on Thursday to help rejuvenate efforts to overhaul the $2.5 trillion U.S. healthcare system, one of his top domestic policy priorities.

The administration official said the White House would publish its updated proposals on Monday but declined to outline details.

The plan is expected to combine features of two Democratic bills passed by the Senate and House of Representatives, according to congressional aides and healthcare advocates.

They are expected to reflect common ground negotiated over the past several weeks by Democratic leaders in Congress.

Obama used his weekly radio and Internet address to take aim at health insurance companies, saying the “status quo is good for the insurance industry and bad for America.”

Democrats are struggling to push healthcare legislation over the finish line in the face of sagging public support and solid Republican opposition bolstered by recent election victories in Massachusetts, Virginia and New Jersey.

WASHINGTON, Feb 20 (Reuters) – President Barack Obama urged Democrats and Republicans on Saturday to find common ground at a White House summit next week he hopes will rejuvenate efforts to overhaul the U.S. healthcare system. Obama also used his weekly radio and Internet address to take aim at health insurance companies, saying the "status quo is good for the insurance industry and bad for America." Overhauling the $2.5 trillion U.S. healthcare industry is Obama’s signature domestic policy, but his fellow Democrats have been struggling to get it through Congress in the face of solid Republican opposition and a skeptical public. "As bad as things are today, they’ll only get worse if we fail to act. We’ll see exploding premiums and out-of-pocket costs burn through more and more family budgets," Obama said. Since the start of the year, Obama has sought to regain control of the public debate on healthcare, revive flagging enthusiasm for the overhaul among some Democratic lawmakers, and inject new momentum into the process. Democrats face tough congressional elections in November in which Republicans are expected to make inroads into their majorities in Congress. The passage of a healthcare bill could boost Democrats’ election hopes. Obama said he had invited members of the Democratic and Republican parties to the healthcare summit on Thursday to share ideas on how to bring down healthcare costs, which he has repeatedly warned threaten to cripple the U.S. economy. POLITICAL THEATER "I hope they come in a spirit of good faith. I don’t want to see this meeting turn into political theater, with each side simply reciting talking points and trying to score political points," he said. "Instead, I ask members of both parties to seek common ground in an effort to solve a problem that’s been with us for generations." Republicans have said they will attend, but they are wary the White House is trying to set a political trap for them, preparing to blame them if the healthcare effort falters. "Nearly one year ago, the president moderated a healthcare summit that kicked off a national debate that has led us to where we are today: a partisan bill devoid of support from the American people and a diminished faith in this government’s capacity to listen. Let’s not make the same mistake twice," Senate Republican leader Mitch McConnell said. The administration, congressional Democrats and advocacy groups have also been turning up the rhetorical heat on health insurers that in recent weeks announced huge premium increases against the backdrop of sizable profits and growing numbers of uninsured people. Obama echoed the criticism, saying the five largest insurers had made record profits of more than $12 billion even as millions of Americans lost their coverage. (Editing by Peter Cooney)

WASHINGTON (Reuters) – U.S. President Barack Obama’s meeting with the Dalai Lama on Thursday comes at a time of increased tension between the United States and China, which has warned that the get-together will hurt Sino-U.S. ties.

GIVEN THE RECENT TENSIONS WITH CHINA, IS THIS A MEETING OBAMA COULD DO WITHOUT?

Meeting the Dalai Lama, albeit not in the more official surroundings of the Oval Office but in the White House Map Room, may help Obama push back against an increasingly assertive China, which has already loudly complained about his plans to sell arms to Taiwan.

“There is a real value to the United States on the one hand making very clear that we not only seek to work with the Chinese on bilateral issues and major global issues, but also indicating that long-standing policies are not about to change,” said Kenneth Lieberthal, a former Clinton administration official now with the Brookings Institution.

Some Chinese websites and hard-line newspapers have called on China’s government to take advantage of an America weakened by its worst economic crisis in decades.

“In light of that I think it is a good thing to push back on both Taiwan and Tibet,” said Douglas Paal, a China expert at the Carnegie Endowment for International Peace, who as a senior official in George H.W. Bush’s administration escorted the Dalai Lama to his first meeting with a U.S. president.

“It restores some credibility with the Chinese that he (Obama) is not a pushover, they can’t try to bully him. I don’t think Chinese officials generally think that, but a lot of Chinese think that. That notion is percolating.”

WASHINGTON (Reuters) – President Barack Obama’s $787 billion stimulus prevented another Great Depression while creating or preserving 2 million jobs, according to a White House report to be released on Wednesday.

The report, signed by Vice President Joe Biden who oversees how stimulus money is spent, stressed the depth of the crisis confronting Obama when he took office 13 months ago, as the President constantly reminds Americans in his speeches.

But it also highlighted Obama’s challenge of trying to cut a 9.7 percent jobless rate that has fueled voter discontent.

The report said the package of stimulus spending and tax cuts “clearly halted an economic freefall.” Obama will get the document at his economic intelligence briefing on Wednesday and he will speak about the economy to mark the anniversary of his signing of the American Recovery and Reinvestment Act at 10.25 a.m. (1525 GMT).

Opposition Republicans, as they have been doing for months, hammered the White House for what they called a “poorly conceived and badly executed” stimulus plan.

“Self-congratulatory ‘stimulus’ spin from this administration is hopelessly out of touch with reality and has about as much as credibility as prior claims that unemployment wouldn’t exceed 8 percent or that jobs would be created ‘immediately’,” John Boehner, Republican leader in the House of Representatives, said in a statement.

BATTLING PERCEPTION

WASHINGTON (Reuters) – President Barack Obama is taking a more direct role in the decision where to try Khalid Sheikh Mohammed, the self-professed mastermind of the September 11, 2001, attacks, the White House said on Friday.

The Obama administration faces growing opposition from Democratic and Republican lawmakers to plans to try Mohammed and four others in a federal criminal court in lower Manhattan. New York City officials also oppose the idea.

A bipartisan group of senators unveiled legislation last week aimed at cutting off funding for the criminal trials, arguing that Mohammed and his fellow accused did not deserve full constitutional rights and could use the civilian trials to espouse their anti-American views.

“Obviously there are efforts on Capitol Hill through legislation to restrict either the type of, or the venue of, a trial for Khalid Sheikh Mohammed and his co-conspirators,” White House spokesman Robert Gibbs told reporters.

“So, since this effort has moved from strictly a Justice Department decision to something that’s in the legislative arena, the White House and by definition the president are involved,” he said.

The move by the group of senators would effectively force the prosecutions into revamped military commissions.

Gibbs would not be drawn on whether military commissions were an option being studied by the White House. “There are a series of things that are being looked at,” he said.

WASHINGTON, Feb 11 (Reuters) – Washington on Thursday dismissed Iranian claims of a leap forward in uranium enrichment and expressed concern that Iran appeared to have “unplugged” Google and other Internet service providers.

The White House did not comment directly on Iranian opposition reports of clashes with security forces on the anniversary of the 1979 Islamic Revolution.

“We continue to monitor events as they happen and try to get the best available information, understanding that a lot of media, Google <GOOG.O> and other Internet services, have been basically unplugged,” White House spokesman Robert Gibbs told reporters.

Separately, U.S. State Department spokesman P.J. Crowley accused Iran of imposing a “near total” blockade on the flow of information in the country, calling it a draconian step.

It was not immediately clear whether the two officials were basing their comments on media reports or independently verified information.

Any clampdown on the Internet would likely fuel tensions between Iran and the international community. The United States and its allies are moving forward with a package of sanctions to punish Iran for its defiance over its nuclear program.

Iranian President Mahmoud Ahmadinejad told a rally marking the 31st anniversary of the Islamic Revolution in Tehran that Iran was able to enrich uranium to more than 80 percent purity, but again denied Iran was seeking to build an atomic bomb.

TEHRAN/WASHINGTON (Reuters) – President Mahmoud Ahmadinejad said on Thursday Iran was close to enriching uranium nearly pure enough for atomic bombs but the United States was dismissive, saying he spoke to rally government supporters on the Islamic revolution’s 31st anniversary.

Ahmadinejad told a vast, flag-waving crowd of government supporters in central Tehran’s Azadi (Freedom) Square that Iran could now enrich uranium to more than 80 percent purity, coming close to levels experts say is needed for a nuclear bomb, although he again denied any such intention.

“The Iranian nation is brave enough that if one day we wanted to build nuclear bombs we would announce it publicly without being afraid of you,” Ahmadinejad said, addressing Iran’s Western enemies.

He told the crowd: “When we say that we don’t build nuclear bombs, it means that we won’t do that because we don’t believe in having it.”

The United States does not believe Iran is capable of enriching uranium to that degree, White House spokesman Robert Gibbs said in response.

“Iran has made a series of statements that are … based on politics, not on physics,” he told reporters.

In Vienna, a think-tank tracking nuclear proliferation said that “while Iran may take longer than expected to make sufficient weapons-grade uranium, few believe it will fail in that effort.”