President George W. Bush said on Saturday that America's new strategy had reversed Iraq's descent into mayhem and the United States was on track to complete the withdrawal of 20,000 troops by mid-year.

After talks at a base in the Kuwaiti desert with his military commander in Iraq, General David Petraeus, and the U.S. ambassador in Baghdad, Ryan Crocker, Bush said security gains in Iraq "are allowing some U.S. forces to return home".

He added: "Any additional reduction will be based on the recommendation of General Petraeus, and those recommendations will be based entirely on the conditions on the ground in Iraq."

Bush conceded that until last year, "our strategy simply wasn't working", with Iraq riven by sectarian violence and al Qaeda militants strengthening their grip in many areas. He said the new strategy, involving a troop buildup and a focus on counter-insurgency warfare, was turning things around.

Bush later flew to Bahrain, a close U.S. ally which hosts the U.S. Fifth Fleet, where he was greeted by King Hamad bin Isa al-Khalifa.

Bush praised the king for Bahrain's efforts on democratic reforms, citing the holding of elections and that a woman was elected to the parliament. "Bahrain's reforms are making your nation stronger, you're showing strong leadership, you're showing the way forward to other nations," Bush said.

About 200 demonstrators gathered near the U.S. embassy in the capital Manama, carrying anti-U.S. placards and some chanting slogans against the ruling family. "State terrorism - Made in USA," read one placard.

In Kuwait, Bush said: "Iraq is now a different place from one year ago. Much hard work remains, but levels of violence are significantly reduced. Hope is returning to Baghdad, and hope is returning to towns and villages throughout the country."

"Al Qaeda remains dangerous, and it will continue to target the innocent with violence. But we've dealt al Qaeda in Iraq heavy blows, and it now faces a growing uprising of ordinary Iraqis who want to live peaceful lives."

With the Iraq war nearing the five-year mark, Bush has refused to discuss any further troop cuts for now, saying that will depend on his commanders' judgments. The limited phased withdrawal of 20,000 troops was announced by Bush in September.

But he gave a sense of the long-term U.S. commitment when he said in a television interview on Friday that the United States would have a presence in Iraq that could "easily" last a decade.

The war remains deeply unpopular among Americans, keeping Bush's approval ratings stuck around 30 percent and below.

But a fall in violence has taken much of the steam out of efforts by Democratic congressional leaders to try to link war funding to troop withdrawal timetables, something Bush refuses to accept. Most Democrats maintain, however, that dramatic changes are needed in Bush's Iraq strategy.

TROOP REDUCTIONS

Petraeus is due to report to the U.S. Congress in March on whether more troop reductions are advisable. Asked on Saturday whether more troops could be withdrawn this year, Petraeus said it was possible but no decision had been made.

Despite heavy U.S. pressure, Iraq's main Shi'ite, Sunni Arab and Kurdish political blocs have failed to agree on major laws seen by Washington as crucial to bridging the sectarian divide. Bush conceded the Iraqi government had to do more.

"Have they done enough? No," he said.

Bush earlier made his first presidential visit to Israel and the occupied West Bank, predicting a peace treaty within a year but with no major breakthroughs. Bahrain was the second of five Arab states Bush will visit to enlist their help in containing Iran's growing regional clout.

U.S. Secretary of State Condoleezza Rice said talks would now turn to "the threats that we've seen in the Gulf, the problem of extremism, whether it be extremism from al Qaeda, Sunni extremism, or whether it be Iran and its tentacles, like Hezbollah and the part of Hamas that Iran supports".

Gulf states have battled al Qaeda militants in recent years, but they are also concerned about the crises in Lebanon and Iraq, as well as the standoff over Iran's nuclear programme.

Local media said Kuwait's emir would tell Bush of his concerns that a U.S. strike on nearby Iran would destabilise the Gulf, key to world oil supplies. Bush is likely to hear a similar message from other Gulf Arab leaders fearful of war.

Bush said in Kuwait that Iran and Syria had to stop promoting violence in Iraq.

"Syria needs to further reduce the flow of terrorists to the territory, especially suicide bombers. Iran must stop supporting the militia special groups that attack Iraqi and coalition forces and kidnap and kill Iraqi officials," he said.