The peace deal in Najaf has demonstrated that U.S. and Iraqi forces can work together to put Iraq on the road to democracy, Secretary of State Colin Powell (search) said on FOX News Radio's "Tony Snow Show."

Powell on Friday praised the peace deal that ended fighting in Iraq's holy city of Najaf (search) and said the presence of U.S. forces in the area helped make it possible.

The secretary said the agreement has led to some improvement in the situation and that it demonstrated good cooperation between U.S. and Iraqi forces in confronting firebrand Shiite cleric Muqtada al-Sadr (search). Al-Sadr and his 3,000-strong militia had been holed up in the Imam Ali Shrine for about three weeks battling U.S. and Iraqi forces.

Powell's comments were somewhat more upbeat than the State Department's initial response Thursday night.

The deal was cut largely through the intervention of Grand Ayatollah Ali al-Sistani (search), Iraq's top Shiite cleric.

Powell said he attached significance to the way in which Iraq's interim government "has started to show leadership and potential in working with Ayatollah Sistani to resolve the situation in Najaf as we see it being resolved over the last 24 hours."

With the nearby presence of coalition troops, especially U.S. troops, "it was clear to Sadr that he had to yield to Sistani and the government," he said.

Al-Sadr "took huge losses" during three weeks of fighting, leaving the capability of his forces diminished, Powell said, adding, "we want to keep that capability diminished."

He said, however, that the U.S. military will be ready if al-Sadr reneges on the latest peace deal like he has on others.

Although al-Sadr has been indicted for murder, Powell said it's up to the fledgling Iraqi government to decide what to do with him.

"Although the new government has declared something of a general amnesty, it's not clear that it applies to him," Powell said. "Right now, we're not pursuing that. Right now, we're pursuing stability in Najaf and stability in that mosque, and it's good to see Iraqi police and Iraqi troops that are providing that stability, but with the nearby presence of coalition troops, especially American troops, that shaped the battle to the point where it was clear to Sadr that he had to yield to Sistani and to the government."

Powell also predicted forces opposed to the election processes in both Iraq and Afghanistan will fail.

"They can't be allowed to win and they will not win," Powell said.

Also in the interview, Powell amplified President Bush's remarks in the New York Times on Friday about a "miscalculation of what the conditions would be'' in Iraq after the fall of former President Saddam Hussein. Powell's take is that no one could have known what conditions would face coalition troops after the leader was deposed.

"You can never be sure what's going to happen," Powell told Snow.

"You make plans, but what you have to be able to do is adjust those plans when faced with reality. There is an old Army expression: No plan survives first contact with an enemy. And so … we have been adjusting, and we continue to adjust to make sure that we don't lose sight of our goal and that we accomplish that goal, and that is a free and democratic Iraq. In the last 24 hours, I think we've seen some improvement in the situation with the resolution of the situation in Najaf."

On another note altogether, when asked if he was going to run for vice president this year, Powell said "of course not … I'm secretary of state and proud to be serving my nation and my president in this way."

There have been rumblings among the Republican Party and elsewhere that Vice President Dick Cheney isn't helping President Bush's prospects in this year's election and that many wouldn't be averse to a change in the No. 2 spot on the presidential ticket.

Asked if he intends to be president at any time, Powell responded: "No, I have no political ambitions, whatsoever, Tony. It's standard. You've heard this answer before … I'll serve the country the way I'm serving it now."

FOX News' Teri Schultz and The Associated Press contributed to this report.