Updated

With just under two months left in the year, 2007 is on course to be the deadliest year on record for American forces in Iraq, despite a recent sharp drop in U.S. deaths.

At least 847 American military personnel have died in Iraq so far this year — the second-highest annual toll since the war began in March 2003, according to Associated Press figures.

In 2004, the bloodiest year of the war for the U.S. so far, 850 American troops died. Most were killed in large, conventional battles like the campaign to cleanse Fallujah of Sunni militants in November, and U.S. clashes with Shiite militiamen in the sect's holy city of Najaf in August.

But the American military in Iraq has increased its exposure this year, reaching 165,000 troops — the highest levels yet. Moreover, the military's decision to send soldiers out of large bases and into Iraqi communities means more troops have seen more "contact with enemy forces" than ever before, said Maj. Winfield Danielson, a U.S. military spokesman in Baghdad.

"It's due to the troop surge, which allowed us to go into areas that were previously safe havens for insurgents," Danielson said. "Having more soldiers, and having them out in the communities, certainly contributes to our casualties."

Last spring, U.S. platoons took up positions — often in abandoned houses or in muddy, half-collapsed police stations — in the heart of neighborhoods across Baghdad and nearby communities. The move was part of President Bush's new strategy to drive Al Qaeda from the capital.

The idea was to fight the "three-block war" — in the words of the Pentagon counterinsurgency manual written in part by America's commander in Iraq, Gen. David Petraeus — by embedding U.S. forces inside Iraqi communities in order to win the trust and, crucially, the aid of residents.

It was the first time many residents had seen U.S. troops up close, rather than whizzing by in armored convoys en route to huge bases that house thousands of troops. And it was the first time many U.S. troops went to bed each night outside those fortresses, to the sounds of Iraqi life: gunfire, the roar of helicopters overhead and an occasional explosion.

The move has worked, U.S. officials say. Increasingly, the sounds of Baghdad include children playing in the streets.

"It's allowed Iraqi civilians to get more comfortable with U.S. forces — increasing the number of tips we get from Iraqi citizens," Danielson said. "That leads us to insurgent leaders and cells, and cleaning those up has led to a decline in violence over the past couple months."

Stationing U.S. troops in communities, where they have reduced the level of Iraqi-on-Iraqi violence, also appears to have helped win the trust of the leaders of Shiite and Sunni communities. And that has helped the U.S. persuade those leaders to join the fight against radical groups, especially Al Qaeda in Iraq.

The U.S. troop increase also put pressure on anti-American Shiite cleric Muqtada al-Sadr, who called a formal cease-fire in August. That, it appears, has slashed the number of mutilated bodies discovered on the banks of the Tigris River and other dump sites each day, the apparent victims of sectarian murders.

At least 1,023 Iraqi civilians died in September, but in October, that figure was just 875.

On average, 56 Iraqis — civilians and security forces — have died each day in 2007. Twenty were killed or found dead on Sunday, including an aide to the finance minister, who was ambushed in Baghdad. Twelve of the deaths were in volatile Diyala province, including an Iraqi soldier, a policeman and an 8-year-old child, all killed separately.

But the same strategy that U.S. military officials say has reduced violence so sharply in recent months is what made 2007 so deadly for American forces.

Small patrol bases make attractive targets for insurgents. In April, nine U.S. soldiers were killed and 20 wounded when two suicide truck bombers rammed into their building in the heart of Diyala, northeast of Baghdad.

It was the deadliest attack on U.S. troops in Iraq in a year and a half.

U.S. troops ventured out on Iraq's roads more frequently in 2007, and insurgents responded by building larger, more powerful and more difficult to detect roadside bombs. On a single day in June, the military announced the deaths of 14 troops, most killed by such explosions.

Diyala's provincial capital, Baqouba, was planted with so many hidden explosive devices that some streets were declared off-limits to U.S. military vehicles.

Today, many places where U.S. troops did not dare venture last year are relatively quiet. Anbar Province, once the heart of the Iraqi insurgency, is now one of the country's most peaceful areas.

Approaching the year's end — more than four months after U.S. forces completed the 30,000-strong force buildup — the monthly death toll among Americans and Iraqis has fallen dramatically.

The number of U.S. troop deaths dropped from 65 to 36 in the same period, according to statistics kept by the AP. That's the lowest monthly toll of American deaths this year.