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LT. GEN. DAVID PETRAEUS, US ARMY: The situation in Iraq is dire. The stakes are high. There are no easy choices. The way ahead will be very hard, but hard is not hopeless.

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TOM FOREMAN: That was General David Petraeus on January 23rd as he was taking on the task of implementing a new strategy in Iraq. We figured that if we wanted to explain what's worked and what's hasn't, first we should remind you what that plan was. CNN's senior military correspondent Jamie McIntyre is here to help me lay it all out. Let's turn to the map first, Jamie. Tell us what it looked like before and then what has happened under Petraeus.

JAMIE McINTYRE, CNN CORRESPONDENT: The United States strategy was to have forward bases in areas where U.S. troops would be located, but the Petraeus strategy is to take those bases and move them really into the local level, divide them into areas where you see here is the number of bases around Baghdad before the surge and here is what it looks like after the surge.

FOREMAN: It's a lot more.

McINTYRE: A lot more, but it's not just a lot more. It's that they stay in these areas and you can see as we put these yellow circles around the sort of area of influence of each one of these bases. As these sort of ink blots sort of blend together, it's supposed to stitch together into a fabric of less violence. We've seen that a little bit.

FOREMAN: What is the theory of having these people in these neighborhoods? What difference does that make?

McINTYRE: Because you have to give the people in the neighborhoods enough confidence that they can live their daily lives, and really the measure of success in Iraq is to the extent that people can live normal lives and then participate in a political process. That's the linchpin for the political reconciliation that has been so difficult to achieve.

FOREMAN: I want to turn to the other wall over here and look at some of the main points of what the strategy is going to be as set out in January 2007: security of the population -- the thing you mentioned, Jamie -- commanders learning their areas really well, maintaining a persistent presence. Beyond that, they wanted to look at economic reconstruction, jobs -- building them there -- working with tribes against al Qaeda, and getting breathing space for a political solution to maybe being worked out. What is the sense in the Pentagon in terms of how they've met those goals through this maneuver?

McINTYRE: Well, they've met the maintaining persistent presence. You've seen that, and it's created the breathing space, but that has not produced the political reform and that's why this coming week you're going to see General David Petraeus not make any recommendation to draw down the number of U.S. troops, not even by a battalion until they see more progress. He says there's a long way to go. It hasn't worked out as fast as he had hoped and he's going to push to keep those troops there a bit longer.

FOREMAN: OK, so now we have a look at where we've been. Let's look at where we might be going in all of this. CNN's Michael Ware joins us from Baghdad right now and from the "Washington Post" studio Rajiv Chadrasekaran, the former Baghdad bureau chief for the newspaper and author of "Imperial Life in the Emerald City." Rajiv, let me start with you in terms of this notion of returning normal life to the people on the street of Baghdad or the rest of Iraq? How much success have we had on that front?

RAJIV CHANDRASEKARAN, WASHINGTON POST: Well, it's happening in fits and starts. There are pockets. There are enclaves of Baghdad where things are starting to get back to normal, but then again, what is normal? I mean, in some markets more shops are reopening, but still, there is an atmosphere of fear, of deep uncertainty and there remains a deep distrust between Iraq's principal groups, the Shiite Arabs and the Sunni Arabs. You know, normalcy is still, quite frankly, a long way off.

FOREMAN: Michael, you talked a great deal about that deep distrust. As the months have gone on, even if we accept the general report that things are getting somewhat less violent, has that mistrust dampened at all or has it deepened?

MICHAEL WARE, CNN CORRESPONDENT: Well, to be honest, Tom, I mean, from the beginning if you speak to various elements of the Sunni insurgency and various elements of the Shia militias, if you can take them at their word and indeed, sometimes by their deeds, you can see that to them this isn't about Sunni versus Shia. They didn't so much share that divide before. In fact, they collaborated together against the U.S. forces in the past. They still don't have that at their heart now, but that's where the political path has taken them. It's the extremists on both sides who are currently dominating the political agenda and until recently, have dominated the military agenda, too.

In terms of the surge, yeah, it's achieved some of the limited military goals it set out to achieve, but let's bear in mind as Rajiv said, we're talking about enclaves. This city has been divided along sectarian lines. Sunni are looking after Sunni. Shia are looking after Shia. The American forces are maintaining their presence and babysitting the government forces who comprise many of these death squads. They're keeping the Shia militias at bay while America is supporting the development of Sunni militias to protect their communities. That's how these numbers are coming down and of course that's bound to have long-term implications.

FOREMAN: Rajiv, one of the things that has been raised over and over again has been this idea of partitioning the country. It was rejected early on and yet, de facto, what Michael is saying, is it's kind of happening anyway. Why don't we look more seriously at a soft partitioning of the country and say let's calm down the Shia area, calm down the Sunnis, calm down the Kurds, who are doing pretty well on that front anyway, and then negotiate a unified government from that?

CHANDRASEKARAN: Well, you know, that is an idea that is gaining a little bit more traction here in Washington and elsewhere. It's the dirty little option that nobody really wants to talk about too much in public, but in private I hear from a number of people I talk to that it is an idea that is gaining a little bit more currency and it's happening in a de facto way. As Michael points out, Baghdad is partitioning as a city into Sunni neighborhoods and Shiite neighborhoods and by the security deals that the United States is engaged in. I mean, these deals that we've been making with Sunni tribal leaders in al Anbar province to go after al Qaeda terrorists and deals that we're striking with Shiite groups in other parts of the country, the creation of these sort of neighborhood or community-wide security forces, those are effectively sectarian forces and so what you are doing is you are creating essentially a security structure that is more sectarian-based and those are the initial steps that one takes in the direction of moving toward something of a soft partition.

FOREMAN: Jamie, as we look at this sort of soft partitioning we're talking about, there's been a lot of success over here in the Sunni areas by changing the approach with the tribal leaders there. Is there a sense in the Pentagon of people saying, look, whatever your politics are going to be in this country in terms of calming it down, we've got to go this way?

McINTYRE: Not yet. It's going to happen by the spring if we haven't seen the results that were hoped for and it's as Rajiv says, it's sort of the dirty little plan B that nobody wants to talk is that whether the U.S. wants this or not, that might be the de facto result if this surge strategy fails and some people say maybe it would be better.

FOREMAN: I want to take one quick moment here to listen to something the president said on Monday about the possibility of pulling troops out and get your reaction, Jamie. Listen to this.

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GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: If the kind of success we are now seeing continues, it will be possible to maintain the same level of security with fewer American forces.

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FOREMAN: Very briefly, Jamie, how is that being greeted in the Pentagon?

McINTYRE: That's seen as a lot of weasel talk. It's -- if the same level of security continues, if things go as we hope, then things will be better, but what Iraq has shown consistently is that things don't go as they hope.

FOREMAN: And Michael, do you think that's something we can count on in the future, that things will, once again, not go as we hope, or is it just simply that we can't predict where we're going to be in a few months?

WARE: Well, I think you can rely on the fact that however this situation devolves in the future, it's not going to be suiting U.S. interests. That is, unless America takes this moment, perhaps one of its last, to use some decisive action, to arrest the momentum and turn it back their way, but quite frankly, we're just not seeing this right now. As senior U.S. officials say, right now the true winners of this conflict are Iran and the tide is definitely still heading in that direction and a soft partition will just de facto legitimatize Iranian interests.

FOREMAN: Very quickly, Michael at the end here. Six months from now, if the surge continues the way it is, will we be better off or worse off overall in Iraq?

WARE: Well, a lot can happen, of course, but even if the surge continues on the path that it does, unless the U.S. is prepared to really fundamentally confront the underlying problems of this government, of this political system, of the Shia militia structures and Iranian influence, you can have better numbers on paper in terms of attacks, but you're still not going to control this situation.

FOREMAN: Very quickly Rajiv, same question to you, better or worse in six months?

CHANDRASEKARAN: Well, I think that we could see further improvements and security in Baghdad and in the areas around it, but fundamentally the grand political compromises that we'll need to see, I don't think it will have meaningful traction. Yes, there may be a few votes in the parliament. Yes, national leaders may come together for a few photo ops, but fundamentally, the grand power sharing bargains, the trust that needs to be built between those communities, I don't think is going to happen, Tom, and so I think fundamentally we will be in some of the same positions of stalemate that we are in today.

FOREMAN: And, Jamie, at the Pentagon six months from now, a surge goes on?

McINTYRE: My prediction is that if things go the same, they'll basically stay the same. The same problem that we're facing now six months from now.

FOREMAN: OK. Thank you all very much for your insights.