"Security is unquestionably and remarkably better" in Iraq, Mullen told a Pentagon press briefing.

"Indeed, if these trends continue I expect to be able early in the fall to recommend to the secretary and to the president further troop reductions."

Mullen, who visited Iraq last week as part of a trip to the Middle East, said he had expected to find security conditions improved.

"I did not expect, however, that those conditions would be at such a level that I could walk the Jamilla market in Sadr City... or that Iraqi security forces would now have the confidence and the command to take the lead as much as they are."

The admiral's assessments come as the last US "surge" brigade is now out of Iraq, with its departure setting in motion a 45-day period to consolidate, reposition units and to reassess the security situation.

General David Petraeus, the US commander in Iraq, will then make recommendations on whether additional troop reductions can be made this year.

Despite a sharp decline in violence, commanders in Iraq have been reluctant to put at risk security gains there with deeper troop cuts. But pressure has grown to shift more troops to Afghanistan, where insurgent violence is up.

There are still 150,000 US troops in country, well above pre-surge levels of 132,000, the Pentagon said.

The five additional surge brigades added about 20,000 troops to the force, but the overall number of US troops grew to as high as 170,000, and only recently has begun to come down.

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