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Google on Monday said that it has made major progress in how well its self-driving cars can handle not just relatively straightforward freeways but also the more complicated leafy suburbs of Mountain View, Calif., where Google is based.

"We still have lots of problems to solve, including teaching the car to drive more streets in Mountain View before we tackle another town," said Chris Urmson, director of Google's self-driving car project, in a blog post. "But thousands of situations on city streets that would have stumped us two years ago can now be navigated autonomously."

In an accompanying YouTube video, Google demonstrates some of the circumstances its self-driving cars now can handle: bicyclists signaling to move across a lane of traffic, railroad crossings, parked cars protruding into the lane of traffic, multiple pedestrians and cyclists entering an intersection, and orange traffic cones around a construction zone.

"A mile of city driving is much more complex than a mile of freeway driving, with hundreds of different objects moving according to different rules of the road in a small area," Urmson said. "We've improved our software so it can detect hundreds of distinct objects simultaneously -- pedestrians, buses, a stop sign held up by a crossing guard, or a cyclist making gestures that indicate a possible turn. A self-driving vehicle can pay attention to all of these things in a way that a human physically can't -- and it never gets tired or distracted."

Google's self-driving cars now have driven nearly 700,000 miles, Google said on Google+.

Google has shouldered a lot of the publicity burdens of self-driving cars, trying to convince the public, regulators, and insurance companies of the technology's positive effects on safety and convenience. It's not yet clear how exactly the company hopes to profit from these sorts of machines -- though one benefit no doubt will be freeing millions of drivers from the duties of driving so they can watch videos, check e-mail, post social-network updates, and do other things that mean more profits for the Internet company. Google posted net income of $12.9 billion on sales of $55.5 billion last year.

screenshot by Stephen Shankland/CNET

Although plenty of people are eager for self-driving cars to arrive, there will be resistance, too, from people who don't trust the technology, who don't want to relinquish the feeling of control, or depending on how much of a premium is charged, who can't afford it.

Ultimately, Google and its comrades in autonomous driving will prevail, according to analyst firm IHS. It forecast in January that sales of self-driving cars will rise from 230,000 in 2025 to 11.8 million in 2035, and that all cars on the road in 2050 will be self-driving.

"Accident rates will plunge to near zero for self-driving cars [SDCs], although other cars will crash into SDCs, but as the market share of SDCs on the highway grows, overall accident rates will decline steadily. Traffic congestion and air pollution per car should also decline because SDCs can be programmed to be more efficient in their driving patterns," said IHS analyst Egil Juliussen, principal analyst, in a statement.

Google is a pioneer, but it's far from alone now in making the sales pitch for self-driving cars.

Nissan, General Motors, and automotive supplier Continental expect self-driving cars on the road by 2020. Ford Motor Co. has unveiled a self-driving prototype car. Telsa Motors wants its system to handle 90 percent of driving duties by 2016 -- a more aggressive schedule and one that's more like what Google has said is attainable.

There are innumerable complications, though, and not all of them are technological. For example, if a self-driving car gets into an accident, who is to blame -- the owner or the manufacturer? And will the insurance company therefore pay for damages? It's one reason that today's prototypes typically have a responsible human driver behind the wheel.

The Brookings Institution think tank said last week that it believes self-driving cars will fit within the existing legal mechanisms.

"The United States has a robust products liability law framework that, while certainly not perfect, will be well equipped to address and adapt to the autonomous vehicle liability questions that arise in the coming years," Brookings said.