By Dominic Evans

BAGHDAD, Sept 28 (Reuters) - U.S. military deaths in Iraq look set to fall this month to their lowest level in a year, a reduction which army officers say shows their stepped-up security drive around Baghdad is yielding results.

Fifty-nine U.S. soldiers have been killed so far this month, according to the Web site icasualties.org which tracks military deaths in Iraq, making it the least deadly month for U.S. troops since July last year.

The reduction will be welcome news to President George W. Bush, who faces domestic pressure to start bringing troops home from an unpopular war in which 3,800 U.S. soldiers have died.

Bush has said his policy of a military "surge" in Iraq is bearing fruit and curbing some of the violence which has raged since he ordered a March 2003 invasion to topple Saddam Hussein.

September's figure is on track to be around half of the death toll for May, when extra U.S. forces started deploying in greater strength into dangerous areas, in what was seen as a last ditch attempt to reduce Iraq's sectarian fighting.

"What we found is that the current operations ... managed to disrupt a lot of (militant) cells," said a U.S. military spokesman, Lieutenant-Colonel Rudy Burwell. "We were able to push them from Baghdad and pursue them".

"That's what we attribute the lower casualties to."

"Obviously (the militants) have not been eliminated, but they have been disrupted," he said, adding indicators of violence including shooting attacks and roadside bombs had been "trending downwards" since June.

Twenty-two of the 59 deaths in September were defined by icasualties.org as "non-hostile", many of them road accidents.

DIYALA VIOLENCE

A breakdown of casualties by region shows the heaviest U.S. tolls concentrated near the capital, with the areas around Baghdad and the province of Diyala to the northeast of the city accounting for more than half of "hostile" deaths.

Nine U.S. soldiers have died in the last two weeks in the volatile province of Diyala, where a suicide bomber killed 26 people in a mosque compound while Shi'ite and Sunni Arab leaders were holding reconciliation talks on Monday.

Asked about September's death toll, Major-General Benjamin Mixon, the U.S. commander for Diyala and other provinces north of Baghdad, said not all regions had seen a fall.

"That's true for Iraq as a whole but it's not true for the north," he said.

Al Qaeda militants in Iraq promised to step up attacks at the start of the Muslim holy month of Ramadan two weeks ago, warning that they would target tribal leaders who have been cooperating with Iraqi security forces.

But in the provinces south of Baghdad, another stronghold of insurgents, the U.S. military says civilian casualties have fallen during Ramadan and that overall violence against U.S. troops and Iraqis has declined in recent months.

"We're seeing both attack and casualty levels have consistently dropped since the start of surge operations," said Major Alayne Conway, spokeswoman for U.S. forces in the "beltway" around southern Baghdad and four south Iraq provinces.

Conway said U.S. soldiers were being helped by increasing numbers of Iraqis alerting them to weapons caches and militant safe houses.

"A couple of months ago we didn't have as many soldiers living among the population. We have more patrol bases now and we've developed relationships," Conway said.

"More and more we have people coming forward saying they are fed up with al Qaeda living in their towns and villages". (Additional reporting by Paul Tait)

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