U.S. officials in contact with Iraq insurgent groups

BAGHDAD (Reuters) - U.S. and Iraqi officials are in contact with representatives of some Sunni Arab insurgent groups to build an alliance against al Qaeda in Iraq, the outgoing U.S. ambassador said on Monday.

"Embassy personnel and some military officials met (them) on several occasions and that process is continuing," envoy Zalmay Khalilzad told his final news conference in Baghdad.

Earlier the New York Times reported that Khalilzad himself had met Sunni insurgent groups, which include nationalists and former Saddam Hussein sympathizers, last year.

Iraqi officials have had contact with insurgent groups in the past but these have never brought progress as the groups' main demand is for U.S. troops to withdraw.

Khalilzad said he did not want to give too many details about who was involved in the talks given "al Qaeda's efforts to derail such efforts".

Al Qaeda militants have launched a string of attacks on a group of tribes in Iraq's western Anbar province that have formed an alliance against the hardline Sunni Islamist group.

"We have had discussions with various groups. The Iraqi government has (too) ... as part of the national reconciliation program. They have taken place, are continuing to take place," the envoy said.

"I did not say we talked to terrorists, we've talked to groups who have not participated in the political process who have ties to some insurgents who are reconcilable."

Khalilzad also said he was cautiously optimistic that "success is possible" in Iraq, but cautioned its leaders to speed up the national reconciliation process.

He listed seven points he said showed great strides were being made in reducing Iraq's sectarian violence, boosting the economy and fighting the Sunni Arab insurgency.

These included a drop in violence in Baghdad by a quarter since a major security crackdown began in February, the growing opposition by Sunni tribes to al Qaeda, the improved performance of Iraq's security forces, and agreement on a new oil law.

"These are positive indicators. They are significant. But for success to be inevitable, more needs to be done," said the envoy, who has repeatedly pressured the Shi'ite-led government to do more to include Sunni Arabs in the political process.

He said the government must demobilize militias, schedule provincial elections, amend the constitution and reach agreement to "allow insurgents to lay down arms and join the political process".

"Our challenge remains incentivising the Iraqi government to make these decisions in a timely manner," he said.

President George W. Bush has nominated Khalilzad to be U.S. ambassador to the United Nations.

The New York Times cited a U.S. official as saying it was hard to confirm whether the people Khalilzad had met really were influential representatives of the insurgent groups and that the insurgency's command was fractured.