The following is a transcript of the exchange between Sen. John McCain and Gen. David Petraeus and Amb. Ryan Crocker at the Senate Armed Services Committee hearing on progress Iraq, held Tuesday on Capitol Hill: 

SEN. JOHN MCCAIN, R-Ariz.: General Petraeus, again, a news report said that Prime Minister Maliki only informed you shortly before the operation. Is that correct in Basra?

GEN. DAVID PETRAEUS, Commander, Multi-National Forces in Iraq: It is, Senator.

We had a heads-up on a Friday night meeting where we, in fact, were planning to resource operations in Basra on a longer-term basis. The following Saturday, we had a meeting during which he laid out a plan for the -- that he was going to deploy forces, laid out the objectives, the lines of operations that he was going to operate along, and stated that he was...

MCCAIN: And it was not...

PETRAEUS: ... moving there on Friday himself -- or on Monday himself.

MCCAIN: And it was not something that you had recommended.

PETRAEUS: It was not something I recommended. No, sir.

MCCAIN: News reports indicate that over 1,000 Iraqi army and police deserted or under-performed during that operation. This is four months after Basra achieved provincial Iraqi control meaning that all provincial security had been transferred to Iraqi security forces.

What's the lesson that we are to draw from that, that a thousand Iraqi police deserted or under-performed?

PETRAEUS: Well, one lesson, Senator, is that relatively new forces -- what happened was in one case, a brigade that literally had just come out of unit (inaudible) fielding was pressed into operation.

The other lesson is a recurring one, and that is the difficulty of local police operating in areas where there is serious intimidation of themselves and of their families.

MCCAIN: Suffice to say it was a disappointment.

PETRAEUS: It was. Although it is not over yet, Senator. In fact, subsequent to the early days, they then took control of the security at the different ports, they continued to carry out targeted raids. The operation is still very much ongoing and it is by no means over.

MCCAIN: The green zone has been attacked in ways that it has not been for a long time. And most of that is coming from elements out -- that leave Sadr City or from Sadr City. Is that correct?

PETRAEUS: That's correct, Senator.

MCCAIN: And what are we going to do about that?

PETRAEUS: Well, we have already taken control of the area that was the principal launching point for a number of the 107-millimeter rockets into Baghdad and have secured that area.

Beyond that, again, Iraqi security forces are going to have to come to grips both politically as well as militarily with the issue of the militia and, more importantly, the special groups.

MCCAIN: What do you make of Sadr's declaration of a, quote, "cease-fire"?

PETRAEUS: Well, as with the cease-fire that was proclaimed in the wake of the militia violence in Karbala in August of last year, it is both to avoid further damage to the image of the Sadr movement -- which, of course, is supposed to care for the downtrodden and has a heavy -- obviously, is a religiously inspired movement but which has been hijacked in some cases by militias, and, in fact, other elements have used it to cloak their activities as well.

If I could, Senator, also point out that along with the operations in Basra, there were operations in a number of other provinces in southern Iraq, all precipitated by this outbreak in militia violence.

In Karbala, Najaf, Qadisiyah, Hillah, Wasit, Dhi Qar and Muthanna, the Iraqi security forces actually did well; in some cases did very well and maintained security. The same is true in Baghdad, although, again, even there, the performance was uneven in some cases.

MCCAIN: There are numerous threats to security in Iraq and the future of Iraq. Do you still view Al Qaeda in Iraq as a major threat?

PETRAEUS: It is still a major threat, though it is certainly not as major a threat as it was, say, 15 months ago.

MCCAIN: Certainly not an obscure sect of the Shiites overall...

PETRAEUS: No.

MCCAIN: ... or Sunnis or anybody else.

Al Qaeda continues to try to assert themselves in Mosul, is that correct?

PETRAEUS: It is, Senator. As you saw on the chart, the area of operation of Al Qaeda has been greatly reduced in terms of controlling areas that it controlled as little as a year and half ago.

But, clearly, Mosul and Nineveh province are areas that Al Qaeda is very much trying to hold onto. All roads lead through the traditional capital of the north.

MCCAIN: They continue to be a significant threat?

PETRAEUS: They do. Yes, sir.

MCCAIN: Ambassador Crocker, let's -- in your statement, you talked about a long-term relationship with Iraq such as a security arrangement, diplomatic, et cetera, economic, that we have with some 80 countries. You envision this after we succeed in this conflict. Is that correct? Or would you talk a little bit about that, elaborate a little more?

AMB. RYAN CROCKER: Yes, sir, I would actually envision it as helping us to succeed in the conflict.

The effort will have two elements.

One will be a status of forces agreement. That will be, as I said, approximately like what we have with 80 other countries. It will have some unique aspects to give our forces the authorities to continue operations after the end of 2008.

There will also be a broader strategic framework agreement first called for by the Iraqi leadership last August, and then reflected in the declaration of principles that Prime Minister Maliki and President Bush signed in November. This will cover, in addition to security, the political, the economic, the cultural -- the whole spectrum of our relations.

MCCAIN: Thank you.

Finally, General Petraeus, Mosul continues to be a battle. Is that correct?

PETRAEUS: It does, Senator...

MCCAIN: And who are the major adversaries in Mosul? It's a mixed population...

(CROSSTALK)

PETRAEUS: The major adversaries are Al Qaeda Iraq, Ansar al- Sunna, Jaish al-Islami and some related Sunni extremist organizations that all are allies of Al Qaeda-Iraq.

MCCAIN: It's once said that Al Qaeda cannot succeed without control of Baghdad and they can't survive without control of Mosul. Is that an oversimplification?

PETRAEUS: A little bit, but not completely, sir. Again, it would be a significant blow to Al Qaeda.

And, in fact, the degree to which they're fighting reflects how much they want to retain the amount of presence that they do have in the greater Mosul area.

MCCAIN: Finally, I hope (inaudible) response, because my time has expired, we could talk a little bit more about the Iranian threat, particularly their stepped-up support of various elements that are Shiite extremists in Iraq, particularly the role they've played in Basra as well as the southern part of the country.

I used up my time. Thank you, Mr. Chairman.