(Embargoed for release at 10:06 a.m. EDT/1400 GMT)

CRAWFORD, Texas, Aug 18 (Reuters) - President George W. Bush said on Saturday that the Iraqi government still has "many important measures" left to meet political goals, just weeks before a report on his Iraq strategy is presented to Congress.

The assessment by Gen. David Petraeus, the top U.S. general in Iraq, and Ryan Crocker, U.S. ambassador to Iraq, due Sept. 15 will look at the impact of Bush's decision to send thousands of additional U.S. troops to Baghdad and Anbar province this year.

It is expected to show a mixed picture of military progress but shortcomings on political reconciliation.

Democrats are pressing for U.S. troops to be pulled out of Iraq as soon as possible. Bush has steadfastly opposed setting a deadline for withdrawing forces, saying such decisions should be made by military commanders on the ground and not politicians.

In his weekly radio address, Bush said political progress was being made at the local level in restive Anbar province, with a mayor and municipal council now functioning in almost every town.

"The rule of law is being restored," he said. "Unfortunately, political progress at the national level has not matched the pace of progress at the local level.

"The Iraqi government in Baghdad has many important measures left to address, such as reforming the de-Baathification laws, organizing provincial elections, and passing a law to formalize the sharing of oil revenues."

U.S. and Iraqi forces in a new offensive are targeting "terrorists and extremists" fleeing Baghdad and other cities to prevent them from returning or setting up new bases, Bush said.

They also will pursue those behind suicide bombing attacks on the Yazidis, a minority sect in northern Iraq, that killed more than 200 people, he said.

"Our hearts go out to the families of those killed, and our troops are going to go after the murderers behind this horrific attack," Bush said.

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