(Adds later Gates comments, Odierno saying misquoted)

By Andrew Gray

WASHINGTON, May 9 (Reuters) - Defense Secretary Robert Gates said on Wednesday the United States could consider reducing troops in Iraq later this year if violence declined enough to let Iraqis advance with reconciliation.

Gates said a progress report in September from Army Gen. David Petraeus, the overall commander in Iraq, and the U.S. ambassador there would determine the future of the higher troop levels ordered by President George W. Bush in January.

"The outcome of that evaluation is not foreordained," Gates told the defense subcommittee of the Senate's Appropriations Committee.

"I think if we see some very positive progress and it looks like things are headed in the right direction, then that's the point at which I think we can begin to consider reducing some of these forces," Gates said.

Violence would not be eliminated, Gates said.

"The question is whether the level of violence is such that the political process can go forward in Iraq. And that then sets the stage for us to begin drawing down our troops," he said.

The buildup is highly controversial politically. As the 28,000 extra troops flow into Iraq, Democrats in the U.S. Congress are trying to pressure the administration to begin withdrawing forces from the country this year.

Later, Gates said there would be no "precipitous" troop movements after the September review, partly because any adjustment was a substantial logistical challenge.

"It will have taken us five full months to strengthen by five brigades just because of the nature of the logistics," he told reporters. "This is a mammoth undertaking."

Army Lt. Gen. Ray Odierno, the top commander for day-to-day operations in Iraq, was quoted as telling The Washington Post that the increase in U.S. troops to a force of around 160,000 "needs to go through the beginning of next year for sure."

"What I am trying to do is to get until April so we can decide whether to keep it going or not," Odierno was also quoted on Wednesday as saying in an interview.

Odierno later said he had been misquoted. He said he had stated that the U.S. military had the capability to maintain the increased troop level until April but that he would make a recommendation on how to proceed in September.

Under Bush's plan, troops are moving from large bases into Baghdad neighborhoods in an effort to clamp down on sectarian violence, which U.S. officials say should allow Iraq's Shi'ites, Sunnis and Kurds to pass reconciliation measures.

But many military analysts believe September is too soon to reach a judgment on the effectiveness of the troop increase.

"If we want results by September, we might as well pull out right now," said Max Boot, a senior fellow at the Council on Foreign Relations think tank, who recently visited Iraq to view U.S. military operations at the invitation of Petraeus.

"It's not going to happen by September; I mean that's insane," Boot said on Tuesday. "We may start to see some results by January."

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