July 18 (Bloomberg) -- A warning by Republican presidential candidate John McCain that al-Qaeda may increase terrorist attacks ``as we get into the election season'' prompted news organizations to report that he was referring to the U.S. election.

Campaign spokeswoman Brooke Buchanan later said McCain was talking about provincial elections in Iraq. McCain hadn't specified what election season he had in mind as he responded to questions at a town-hall meeting with General Motors Corp. workers in Warren, Michigan.

Before the clarification, Bloomberg News, the New York Times and CNN reported that the presumptive Republican nominee meant the U.S. election. Iraq's provincial elections may be held later this year.

``Al-Qaeda is on their heels but not defeated,'' McCain said at the town-hall meeting. ``I also predict that they will make an attempt, as we get into election season, to make more of these spectacular kinds of attacks'' such as suicide bombings to destabilize the government of Iraqi Prime Minister Nuri al-Maliki.

McCain, an Arizona senator, has spent much of this week touting his foreign policy and war experience while Democratic rival Barack Obama prepared for a trip to the Middle East. McCain has criticized Obama, an Illinois senator, for vowing to withdraw troops from Iraq within 16 months of taking office. McCain said the deployment of extra U.S. troops to Iraq last year has worked.

``Senator Obama said the surge would fail. He still fails to admit that it has succeeded,'' McCain said in response to a question from the audience. ``I am confident we will win.''

Threat Assessment

In February, U.S. intelligence agencies told Congress in their annual threat assessment that hundreds of operatives with al-Qaeda in Iraq had been killed or captured and that the Sunni population, which originally had been supportive, had turned against the group. These setbacks have made it harder for the group to be effective, although they still could mount lethal attacks, the report said.

Earlier this year, McCain adviser Charlie Black caused a controversy when he was quoted in a Fortune magazine interview that the assassination of former Pakistani Prime Minister Benazir Bhutto before the New Hampshire primary ``helped us'' by highlighting that McCain ``is the guy who's ready to be commander in chief.'' Black added that a ``fresh terrorist attack certainly would be a big advantage'' politically.

Black later said he ``deeply'' regretted making the statement and McCain distanced himself from the comments.

To contact the reporter on this story: Lorraine Woellert in Warren, Michigan, at lwoellert@bloomberg.net.

Last Updated: July 18, 2008 18:22 EDT