BAGHDAD — Five years after the U.S.-led invasion, Iraq remains a divided country with an unstable government and endemic violence.

The violence has subsided some, however, and that's opened new prospects for the top two U.S. officials in Iraq.

"As progress is made, it clears away some of the smoke and dust that maybe has obscured challenges down the road, so you see those with greater clarity," U.S. Ambassador to Iraq Ryan Crocker told McClatchy Newspapers in an interview. "It is going to be a long, long process of building and developing a stable and safe society."

Crocker goes to bed every night with "at least 187 challenges" on his mind; every time something gets better, a new problem reveals itself, he said.

Army Gen. David Petraeus, the U.S. military commander in Iraq, has a slide show of what he calls "storm clouds." Among the clouds: sustaining security gains after a quarter of the American ground troops return home in July, providing basic services, preparing for provincial elections, helping more than 93,500 mostly Sunni Muslim security forces now being paid by the United States transition into the Shiite-led Iraqi government.

He worries about keeping militants and insurgents out of areas that have been largely secured, and about fighting them in the Diyala River valley, the Tigris River valley, the Zaab River triangle and in Ninevah province.

He also watches Iran and what he calls its continued support of Shiite militias.

"We've got to continue and complete the reduction of our forces . . . by over a quarter of our ground combat power," he told McClatchy. The challenge is to "carry that out while preserving the security gains that we've fought so hard with our Iraqi partners to achieve . . . we very much have to continue to help Iraqi authorities to cement those gains."

In his first months as commander, Petraeus and his deputy, Army Gen. Raymond Odierno, would ask each other at morning meetings when the violence would abate.

Now that violence has fallen to 40 percent below its peak, he knows that things could reverse — and, indeed, the level is starting to rise again after bombings that have killed dozens in the capital and the provinces.

"The progress is still tenuous. It is fragile. It is reversible," he said.

Nearly a year ago when Crocker arrived as the chief U.S. envoy, he described the Iraq war as the first half of the first reel of a five-reel movie.

"We're out of the first reel and into the second, but Iraqi media productions incorporated just keeps adding on reels on the far side," he said as he sipped coffee inside Saddam Hussein's Republican Palace, which is now the U.S. Embassy.

Crocker said that violence had been "driven down substantially," and the challenge now is to "keep it down and push it down still further."

"This year has shown that security is the linchpin. If you've got it, then other things start happening. If you don't, nothing good happens. We cannot lose sight of that focus as we focus on the things that are now both possible and necessary."

A year ago, Crocker, who speaks Arabic fluently, walked the streets of the east bank of Baghdad, shocked to see the devastation, the abandoned homes and the empty streets.

Now he's more relaxed but cautious about the future. The challenges ahead include a battle for power in the south, restoring services to homes, rebuilding the economy and political reconciliation.

"Our emphasis has shifted from infrastructure to capacity building to help the Iraqis operate effectively as a government at all levels at the federal, the provincial the district and the local levels," Crocker said.

In the last year, only one of the benchmarks legislated by the U.S. Congress to measure progress in Iraq was accomplished, a law that's supposed to soften the hard-line stance that banned members of Saddam's mostly Sunni Baath Party from power.

These benchmarks, which include a law on the distribution of Iraq's oil wealth, are important, but not the only measure of progress, Crocker said.

"Having heard the first six months I was here 'security, security, security' — very few people are talking about security now," he said. "Now it's how come the power doesn't work, my cousin needs a job, we've never seen a single soul from the municipality."

Crocker and Petraeus are to return to Washington in April to testify about the situation in Iraq.

With Senators Hillary Clinton and Barack Obama vying for the Democratic presidential nomination with differing proposals for an accelerated troop withdrawal, Crocker warns that the course they advocate carries real risks.

"I think it's vital that we stay with it because the cost of failure ... would be pretty dramatic," he said. "For us to walk away from this now, I think, would send Iraq, the region and us down that road of failure."

Petraeus is on his third tour in Iraq, and he soon will have served for 3-Z\x years.

When he arrived as the top commander, Sunnis were pitted against Shiites in a spiraling civil war.

A year later, things are calmer. The surge of additional U.S. troops and a counterinsurgency strategy to put more U.S. troops in the streets were key elements in the change, along with recruiting U.S.-paid Sunni militias to fight al Qaida in Iraq, and a ceasefire by radical Shiite cleric Muqtada al Sadr's Mahdi Army militia.

"We had very, very tough challenges during that period in particular," Petraeus said of his first six months.

"The ambassador and I will often say that we're neither optimists nor pessimists; we are realists, and the reality is that everything in Iraq is hard."