April 7 (Bloomberg) -- Last September, U.S. Army General David Petraeus assured Congress that Iraqis would be able to end the bloody rivalry between Shiite groups in the oil-rich south by themselves.

Late last month, the U.S. carried out air strikes to help struggling Iraqi troops fighting a Shiite militia for control of the southern city of Basra.

Petraeus, the commander of U.S. forces in Iraq, likely will have to explain why his optimism proved misplaced when he returns to Congress this week to defend his call for a pause in withdrawing troops once soldiers sent for last year's ``surge'' of reinforcements are brought home.

Senate Foreign Relations Committee Chairman Joseph Biden said his panel will ask Petraeus tomorrow what the troop surge accomplished and what the U.S. will do next.

That's ``not just a tactical question of U.S. force levels,'' Biden, a Delaware Democrat, told reporters on April 1. Congress wants to know what policy the U.S. will undertake to ``leave behind a self-sustaining government.''

Petraeus's testimony may raise the prominence of the Iraq War as a divisive presidential campaign issue. All three major candidates -- Democratic Senators Barack Obama and Hillary Clinton and Republican Senator John McCain -- plan to question the general at the hearings. The general also will also appear before the Senate and House armed services committees and the House Foreign Affairs Committee.

McCain, Obama Spar

In a preview of these political fireworks, McCain and Obama sparred at long distance today over Iraq. McCain, speaking to the Veterans of Foreign Wars in Kansas City, Missouri, said the U.S. was ``no longer staring into the abyss of defeat'' and should reject calls for ``a hasty, reckless and irresponsible withdrawal'' from Iraq.

``We have before us a hard road, but it is the right road,'' McCain said. ``Those who disregard the unmistakable progress we have made in the last year and the terrible consequences that would ensue were we to abandon our responsibilities in Iraq have chosen another road.''

Obama retorted in a statement that it is ``a failure of leadership to support an open-ended occupation of Iraq that has failed to press Iraq's leaders to reconcile, badly overstretched our military, put a strain on our military families, set back our ability to lead the world, and made the American people less safe.''

Easing Tensions

Petraeus, 55, and U.S. Ambassador to Iraq Ryan Crocker, 58, who also will testify, have said security has improved and Iraq's Shiite-dominated government has begun easing sectarian and ethnic tensions yet must move faster toward compromises. Unresolved issues include Sunnis' role in national and local politics, intra-Shiite feuds and the extent of Kurdish rule in the north.

The general and the ambassador probably also will be asked why Iraq, benefiting from the 60 percent rise in oil prices since the surge began, isn't paying more for the occupation as American taxpayers cope with a possible recession.

Senator Carl Levin, a Michigan Democrat who chairs the Armed Services Committee, said Iraq has stashed billions of dollars of ``surplus funds'' in foreign banks.

Funding `Outrage'

``It is an outrage that we continue to pay for the reconstruction of Iraq, that we continue to pay for the training of the Iraqi army, while we are laying out tens of billions of dollars in extra money being paid for gasoline, some of which comes from Iraq, at three and a half dollars a gallon,'' Levin told reporters April 4.

A senior Republican senator, Jon Kyl of Arizona, said today that members of his party share that concern, while cautioning that lawmakers should wait for all the facts before moving to legislate on the subject.

``We don't want the Iraqis foisting the bill on the back of American taxpayers when they have the funds to put toward these reconstruction efforts themselves,'' he told reporters in a conference call.

On the issue of shrinking the occupation force, Petraeus likely will say that while the last of the five combat brigades sent to Iraq in the surge can leave as planned by July, further withdrawals should be postponed.

That proposal will find favor with most Republicans, including President George W. Bush, who has already blessed a pause after the five brigades come out.

Presidential Race

Democrats don't have the votes to force the pullout of more soldiers, and about 140,000 U.S. troops will still be in Iraq later this year, when the presidential race reaches its climax.

While voters are focused on economic issues, the outbreak of fighting in Basra served as a reminder of Iraq's ability to command instant attention.

Senator Evan Bayh, an Indiana Democrat on the Armed Services Committee, said Basra showed Petraeus was wrong when he told lawmakers last fall that Iraqis could resolve the tensions there on their own. ``It raises questions about our assessment there,'' Bayh said in an April 4 interview.

The fighting started March 25 when Iraqi Prime Minister Nuri al-Maliki sent troops into Basra to wrest control from the militia of Shiite leader Moqtada al-Sadr and other armed groups.

It spread quickly to Sadr's Baghdad stronghold and ended -- at least temporarily -- six days later in a brokered cease-fire. It flared up again in Baghdad yesterday, when U.S. and Iraqi forces tried to gain control of areas used by Shiite militias to fire rockets into the heavily fortified Green Zone, yet failed to stop the rocket attacks, the New York Times reported.

Hezbollah Comparison

The peace agreement between Sadr and the government was reminiscent of Hezbollah's perceived 2006 victory in Lebanon, after the Muslim militia outlasted an assault by Israel, said retired Army Lieutenant General William Odom.

``By surviving the cleanup operation that Maliki intended, Sadr is the winner, just like Hezbollah,'' said Odom, a former director of the National Security Agency who teaches at Yale University in New Haven, Connecticut.

Another retired Army general, Jack Keane, said Maliki had crossed ``a major strategic threshold'' with the offensive. He said the ultimate target was Iran, which supports Sadr and other armed Shiite groups to keep Maliki's government weak.

Iran denies backing armed groups and says it favors a stable Iraq.

Keane, an architect of the U.S. troop surge, cautions that Maliki will need months to defeat the Iranian-backed groups ``because they've spent so much time building up their influence.''

Keane and Anthony Cordesman of the Washington-based Center for Strategic and International Studies argue that the instability in the Iraqi south shows the wisdom of Petraeus's call for a freeze on further U.S. troop withdrawals after the last surge brigade comes home.

Retired Army Lieutenant General Robert Gard says the Basra fighting suggests the opposite.

``Iraq is more bitterly divided among ethnic and sectarian lines than it was before the surge began,'' he told reporters last week.

To contact the reporter on this story: Ken Fireman in Washington at kfireman1@bloomberg.net

Last Updated: April 7, 2008 13:46 EDT