"Nobody in uniform is doing victory dances in the end zone," Petraeus told reporters travelling with US Defence Secretary Robert Gates, who arrived in Baghdad Wednesday on an unannounced visit.
Gates said on Wednesday that the violence in Iraq had dropped to levels not seen since the bombing of a Shiite shrine in the central town of Samarra that unleashed brutal Shiite and Sunni conflict nearly two years ago.
He said the reduction in violence meant the "goal of a secure, stable and democratic Iraq is within reach."
On Thursday, Gates traveled to Bahrain where more than 200 ministers, security officials and anti-terrorism experts from around 50 countries have gathered for a four-day forum on conference on regional security.
Before wrapping up his Iraq visit, Gates met Petraeus in Baghdad .
"It was a closed meeting between the two to discuss items of interest to the secretary of defence and General Petraeus," US military spokesman Lieutenant Justin Cole said in a statement, without offering details.
Petraeus, who in September announced to Congress the first possible elements of an American troop drawdown in Iraq, was more cautious on Thursday.
"We work hard to build up on the progress made" but "we have to be careful not to feel too successful," he said.
"Certain days we certainly feel very good but there are still attacks. We have seen continued improvements," he said, adding that there was "much hard work still to be done and issues to be addressed".
Petraeus attributed the drop in violence to series of factors, including a rise in the number of Iraqi security personnel, rejection of Al-Qaeda by the Sunni Arabs, rising support from neighbouring countries like Syria and a six-month ceasefire by radical cleric Moqtada al-Sadr.
He said the US military is keenly watching Iran and its promise to help in curbing bloodshed in Iraq.
"We have seen reduction of signature attacks (explosively formed penetrators)" but "we are all in a wait and see mode," he said.
The US military has regularly charged that Iranian-backed Iraqi Shiite extremists smuggle EFPs, fist sized bombs that cut through a heavily armoured military vehicle, and use them against the coalition forces.
But last month Gates told reporters in Washington that he believed Tehran had assured Baghdad of helping in controlling the bloodshed.
"We are hopeful Iran will take up his promise to stop," said Petraeus.
Petraeus further stressed that the military continued to chase Al-Qaeda in Iraq fighters.
"Rest assured we try to make the adjustments necessary to pursue them and not establish the kind of bases like Baqubah and other places," the general said, referring to the city north of Baghdad which has Al-Qaeda hideouts.
Petraeus also said the US military is giving more and more responsibility to Iraqi forces and adopting a "flexible" approach as in Anbar province in the west.
Since last year violence in Anbar has dropped, as local Sunni tribes align with the US military and fight Al-Qaeda militants.
More and more Sunni Arabs, who once fought the military, are now turning allies of the American soldiers.
The military calls them "concerned local citizens" and uses them as neighbourhood guards.
On Thursday, Petraeus made a case for these CLCs again, saying they offer intelligence in areas where there are no security forces.
He, like Gates, called for their integration into the security forces.
US forces, meanwhile, killed three "terrorists and detained 19 suspects during operations Thursday to disrupt Al-Qaeda," the military said in a statement.