US Election: Obama Tells O'reilly That Iraq Surge is Working During Interview on Murdoch's Fox News Network

Barack Obama tonight walked into the hostile territory of the rightwing network, Fox News, and said that the troops surge in Iraq was working "beyond our wildest dreams" in an appearance meant to reassure conservatives about his readiness to be commander-in-chief.

It was the first time Obama had agreed to appear on the network after it referred to his wife, Michelle, as a "baby mama," confused his name with Osama bin Laden's, and accused the couple of performing a "terrorist fist bump".

The much-anticipated interview, which required the personal intervention of Rupert Murdoch, was designed to draw attention from John McCain on the night that he was to accept the Republican nomination.

Obama turned the occasion into an effort to persuade a conservative audience that he could be tough a leader in the fight against al-Qaida and Iran.

The Democrat was careful to borrow some of the most loaded phrases of George Bush, saying he absolutely believed that America was engaged in a "war of terror".

In the most surprising admission perhaps for a conservative audience, Obama said that George Bush's troop surge had improved security in Iraq.

"I think that the surge has succeeded in ways that nobody anticipated," Obama told host Bill O'Reilly. "It's succeeded beyond our wildest dreams."

However, he warned that the real gains from the improved security were limited. "The Iraqis still haven't taken responsibility. And we still don't have that kind of political reconciliation."

McCain and other Republicans have repeatedly accused Obama of refusing to admit that the surge had been effective. They kept up the charge tonight. Well after Obama's interview aired, Lindsey Graham, a conservative senator from South Carolina, told the Republican convention Obama was still refusing to admit the surge had produced results. "Barack Obama's campaign is about losing in Iraq," Graham said.

On Iran, Obama again sought to counter charges from the Republicans that he failed to appreciate the threat posed by Iran's rogue nuclear programme. "It is unacceptable for Iran to possess a nuclear weapon. It would be a game changer," the Democrat said.

He said he would never rule out using military force against Iran - though he would use diplomacy first.

"It's sufficient to say I would not take military action off the table, and that I will never hesitate to use our military force in order to protect the homeland and the United States' interests."

Tonight's appearance by Obama came about as part of a truce engineered by Murdoch, who convened a sit-down between Obama and the network's chairman, Roger Ailes, earlier in the summer.

The Obama camp argues that Fox has been extremely biased in its coverage of the Democrats. In the summit hosted by Murdoch, Obama apparently told Ailes he had no intention of appearing on Fox if the network was going to continue to portray him and his wife as foreigners and terrorists.

But Ailes and Obama also discussed the possibility of an appearance on the O'Reilly Factor, with the Fox news chairman reportedly offering an assurance that the interview would be fair and above board.