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TONY HARRIS: And good evening, everyone. I'm Tony Harris in tonight for Rick Sanchez.

We'll start in Iraq where America's top ally is cutting its losses or in the minds of many in Washington, cutting and running at Iraq's moment of truth. Today the last British forces withdrew from the center of Basra. The 500 troops join the rest of the British contingent dodging fire at the city's airport. This sets the scene for a probable British pullout and it leaves the fate of Iraq's second-largest city to Iraqi forces and the powerful Shiite militias.

Our coverage starts in Baghdad with CNN's Michael Ware.

MICHAEL WARE, CNN CORRESPONDENT: In Iraq, the overnight withdrawal of 500 British forces from the last of three British-run outposts in the southern oil-rich city of Basra marks the end of British military domain of southern Iraq.

Where British forces once dominated five provinces, this is the last act in the preparation of the handover of the fifth and final province.

Whilst the move had been announced by the British government back in February, it is certain to heighten tensions between London and Washington over differing opinions of military strategy here in Iraq.

While the ministry of defense in London and the British embassy here in Baghdad defend the move as preplanned and in alignment with British policy to ultimately hand security over to Iraqi authorities, American and Iraqi critics are sure to label this as a symbol of defeat.

Indeed, British forces have struggled to maintain influence and control in southern Iraq almost since their arrival in the invasion in March 2003.

Government and security forces have long been dominated by what U.S. military intelligence says are Iranian-backed Shia militia forces. It is militia forces who have run the south and it's the British who have been attempting to merely hold the line.

This act, though planned, is symbolic of what many will consider failure across southern Iraq. Michael Ware, CNN, Baghdad.