EC: "...America's competion with Iran, which in many ways America is losing."

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Campbell Brown speaks with Michael (in the NY studio), Candy Crowley (in DC), and Nic Robertson (in Baghdad) and previews tomorrow's testimony from General David Petraeus and Ambassador Ryan Crocker.

CAMPBELL BROWN, CNN ANCHOR: We are, though, going to start with the war in Iraq. All eyes will be on Capitol Hill tomorrow, when the top two Americans in Iraq, General David Petraeus and U.S. Ambassador Ryan Crocker, give lawmakers a progress report. Now, among the U.S. senators they will be reporting to: presidential candidates Hillary Clinton, Barack Obama, and John McCain.

Pentagon officials tell CNN they do not expect General Petraeus to recommend additional U.S. troop cuts. And while the violence has been down dramatically since last year, there has been a new spike in fighting for the past few weeks, ever since Iraqi security forces tried to take out some of the Shiite militias.

Despite the new violence, Senator McCain today told the Veterans of Foreign Wars that our Iraq strategy is finally on the right track.


SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: We are no longer staring into the abyss of defeat, and we can now look ahead to the genuine prospect of success. Our goal is an Iraq that no longer needs American troops. And I believe we can achieve that goal perhaps sooner than many imagine.


BROWN: During that speech, McCain staked out the battle lines for tomorrow by labeling his opponents' plans to withdraw U.S. forces from Iraq as the height of irresponsibility and a failure of leadership. It could be quite a showdown tomorrow.

We have got senior political correspondent Candy Crowley joining us from Washington. Senior international correspondent Nic Robertson is in Baghdad, where he has been embedded with U.S. and Iraqi forces, and Michael Ware is based in Baghdad, but tonight he is here with us in New York in the ELECTION CENTER.

Welcome to everyone.

And welcome to you, Michael. It's good to have you here.

Let me start with you. You're recently back from Baghdad.


BROWN: So, it's been about six months since we heard from Petraeus and Crocker the last time they were on Capitol Hill. What do you think has changed over the last six months, based on what you have seen on the ground?

WARE: Well, some of the early gains of the surge have been consolidated, all right?

But, first, you have to ask yourself, what exactly is the surge? Now, here in America, it's sold as this thin veneer of 30,000 additional combat troops sent to reinforce the capital. But it's actually a lot more than that. And it began well before President Bush's January 10 speech last year.

Basically, America cut a deal with the Baathist insurgency putting 70,000 insurgents on the U.S. government taxpayer payroll. They have accommodated anti-American Shia cleric Muqtada al-Sadr, they now recognize him as a legitimate player in the country, where once they hunted him.

BROWN: Right.

WARE: And they have assisted in cementing or institutionalizing the sectarian cleansing of the capital, Baghdad, by erecting blast barriers around Sunni and Shia communities, so they can't get at each other and slaughter each other.

Now, all of this has brought the death toll down. And no one is going to begrudge that. We all celebrate that. But essentially what we have seen America do is build Sunni militias to counterbalance Iran's militias and to use as a stick to beat the Iraqi government, which is a so-called ally of the U.S.

So, what we have seen is a consolidation of all of that and we have also seen a consolidation of Iranian influence in Iraq, which is the real story now of this war, America's competition with Iran which in many ways America is losing.

BROWN: Well, let me bring Nic into this and talk about -- a little bit about what's happened over the last couple of days.

And, Nic, you have seen some pretty dramatic stuff I know over the last few days from your position, and we have some video. I believe this is from Sadr City of a gun battle that was ensuing earlier. You can hear gunshots in the background. But walk us through the kind of things you have witnessed in this most recent fighting.

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, what we're seeing on the streets of Sadr City is a really intense urban warfare where U.S. and Iraqi troops are fighting side by side against the militia of Muqtada al-Sadr, the Mahdi army.

This fight is one where the Iraqi troops are still afraid to go into the front, where they're not quite ready to go into the front, where the job of the U.S. troops who are fighting with them is to encourage them and push them forward. The Iraqi army has been equipped, it's been trained, but they still don't believe -- they haven't taken that threshold step of really believing in themselves in a lot of cases and that's what the American soldiers we were with was encouraging the Iraqi army to do.

But the bigger picture of what they're doing is about two weeks ago the prime minister, Nouri al-Maliki, opened up a new offensive against Shia militias here, in particular the militia of cleric Muqtada al-Sadr. This is a new dimension to the war, as Michael was saying, and it's a big one. Over two million Shias live in Sadr City.

It has become a safe haven for militias, where they are armed and equipped and trained by Iran. They use Sadr City to fire missiles into the Green Zone here, the secure International Zone, where the U.S. Embassy is. The weekend before last, two Americans were killed there by missiles fired from Sadr City. So it's high stakes for everyone right now, but it is a new departure and a new dimension, the government cracking down on these Shia militias with the army not quite ready to do it yet -- Campbell.

BROWN: Well, and, Nic, let me bring up a map that we have just to help you explain it to people a little better. This will demonstrate that there's only a very small portion of Sadr City where U.S. troops can even patrol. Is that correct?

ROBERTSON: What's fascinating about that map is Sadr City is this huge area, two million to 2.5 million Shias and if you look, there is a very thin sliver at the bottom section of the map. That became critical, because that was the zone the Shia militias with Iranian-made missiles had to get into to fire those missiles accurately at the Green Zone, the International Zone, the U.S. Embassy.

That became the critical battleground. That is where U.S. troops have been going into. But the vast majority of Sadr City, U.S. troops can only go into very, very, very rarely, perhaps only a couple of times over the past three or four months, and that's what's made it a safe haven for these Iranian-backed special groups with training and equipment from Iran. And that's the big concern.

BROWN: Candy, let me bring you into this and let's talk a little bit about the politics of it. We have got General Petraeus and Ambassador Crocker going to Capitol Hill tomorrow. All three presidential candidates are going to be there to have the opportunity to question them, essentially playing two roles, senator and presidential candidate.

Talk us through that clash and how that's likely to play out tomorrow.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Well, I think right away we can say they're going to be seen as presidential candidates. This is now too far into the season for them to be anything else but that.

It's going to be tricky, I think, for Barack Obama and for Hillary Clinton, because obviously the Democratic Party very anti-war. And what they have wanted is candidates who got tougher and tougher and tougher on this war.

And then you have General Petraeus, a man of great esteem. And what these candidates need to do is first of all criticize the war without looking as though they're being disrespectful to him and they also have to look presidential, so they can't be picky. They can't look mean. They have to kind of, you know, rise above what normally is the Senate byplay and they have to look presidential, particularly Barack Obama, but also Hillary Clinton.

For John McCain, I think we will hear more of what we heard today, which is, listen, what about the Iraqis? What would it take for us to leave the Iraqis in a safe place? Because what John McCain has to do is prove that he does want an end to the war, but he wants it in a responsible way, because that way he hopes to differentiate himself obviously from the Bush administration.

So, I think there's lots of byplay here. Everyone will be trying to prove their point, but they have to be presidential while they do it.

BROWN: All right.

To Nic, to Michael here in the studio with me, and to Candy in Washington, as always, thanks, everybody. Appreciate it.