The reduced number of troops in Iraq - from 124,000 to 120,000 by the end of October - marks the latest U.S. step in winding down the six-year war. Army Gen. Ray Odierno plans to announce the reduction Wednesday.

"We have already begun deliberately drawing down our forces - without sacrificing security," Odierno said in a statement he was to deliver to the House Armed Services Committee.

"As we go forward, we will thin our lines across Iraq in order to reduce the risk and sustain stability through a deliberate transition of responsibilities to the Iraqi security forces," Odierno said.

A copy of the testimony was obtained Tuesday by The Associated Press. A Defense Department official confirmed Odierno planned to announce he is reducing the number of brigades in Iraq, as has been widely expected.

In his eight-page statement, Odierno voiced cautious optimism about Iraq's future. But his outlook for the nation he called an enduring U.S. interest was far from rosy.

He predicted several looming problems as U.S. troops prepare to end combat missions by September 2010 and leave Iraq at the end of 2011.

Those problems include:

- "A clear security lapse," Odierno said, was evidenced by a pair of truck bombings Aug. 19 at Iraq's finance and foreign ministries, which killed about 100 people in Baghdad.

- A system of government that is accepted across what Odierno described as ethnic, sectarian and regional lines has yet to be agreed on. He described a power struggle between provincial officials and Baghdad and said long-standing tensions continue to stall progress between Arabs and Kurds.

As the January elections approach, military officials have identified Arab-Kurd tensions as one of the top concerns for potential violence, especially in contested territories in the oil-rich north that each side claims as its own. Still, Odierno said the darkest days of the Iraq war seem to be long gone, citing failed efforts by extremists still seeking to destabilize the nation.

"The overwhelming majority of the Iraqi people have rejected extremism," Odierno said. "We see no indications of a return to the sectarian violence that plagued Iraq in 2006-2007."

- Although Iraqi leaders had planned to find government jobs for all members of a group known as Sons of Iraq, who helped curb the insurgency, "we do not believe they will meet this timeline," Odierno said. "We continue to monitor the progress of this program very closely."

Iraq's government promised to open thousands of police and military jobs, dominated by Shiites, to the Sons of Iraq, who are mostly Sunni. But the government has been accused by Sunnis of dragging its feet on integrating the jobs. Odierno, however, said 23,000 former Sons of Iraq have begun working in government jobs since 2008, and 5,000 more will start next month.

On the bright side, Odierno cited data showing that the monthly number of attacks in Iraq has dramatically dropped over the last two years - from more than 4,000 in August 2007 to about 600 last month.

He also said that far fewer al Qaeda and foreign fighters remain in Iraq, and most of those who are left are criminals and disenfranchised Iraqis who have been recruited by what Odierno described as a "small ideological core" of insurgents.