"Many of us had hoped this summer would be a time of tangible political progress at the national level ...," Petraeus wrote in a letter to his troops posted on his Baghdad command's web site. He assured them that security conditions in Iraq have improved and that U.S. forces are "building momentum."

But he acknowledged that the central government had fallen short of expectations when President Bush announced in January that he was revising his war strategy and ordering 21,500 more combat troops to battle.

"One of the justifications for the surge, after all, was that it would help create the space for Iraqi leaders to tackle the tough questions and agree on key pieces of `national reconciliation' legislation," he wrote. "It has not worked out as we had hoped.

"All participants, Iraqi and coalition alike, are dissatisfied by the halting progress on major legislative initiatives such as the oil framework law, revenue sharing, and de-Baathification reform."

The letter appeared to be a preview of the war assessment Petraeus is due to provide to Congress on Monday.

Petraeus said that despite the political inaction he sees reason for hope in light of a late-August gathering of Iraqi political leaders that produced a consensus - but not legislative action - on reconciliation moves.