JALAWLA, Iraq (Reuters) - It was a tip-off about a weapons cache that drew the U.S. soldiers of Charlie Troop away from their Stryker armored vehicles in the densely populated Iraqi town of Jalawla one Friday morning last month.

A U.S. Army soldier looks through the scope of his rifle during a patrol in the town of Jalawla, northeast of Baghdad, June 28, 2010. REUTERS/Saad Shalash

That was when the suicide bomber struck, detonating a car bomb so “catastrophic” that details of the attack that killed Sergeant Israel O’Bryan and Specialist William Yauch are still hazy, their commanding officer said.

One thing was clear: the insurgency in Jalawla won’t lie down.

Like other towns across Iraq’s restive northern provinces of Diyala, Kirkuk and Nineveh, Jalawla defies the U.S. narrative of an end to combat operations next month under a plan to pull out of Iraq completely by the end of 2011.

“I would say we’re pretty far from rolling up the insurgency in Jalawla,” said Charlie Troop commander Captain Mark Adams of the 1st Squadron, 14th U.S. Cavalry. “I don’t feel we’ve made a whole lot of progress there.”

For the ethnically and religiously-mixed arc running from Jalawla near Iraq’s eastern border with Iran to the western frontier with Syria, the transition on August 31 is less a milestone than a matter of semantics.

Operations that to outsiders will look pretty much like combat will continue in areas where a stubborn Sunni Islamist insurgency remains entrenched, despite a sharp fall in overall violence since the height of the sectarian slaughter in 2006/07.

They will, however, be called “stability operations,” loosely defined as advising, assisting, training and equipping Iraqi forces -- a role U.S. forces have had for some time.

U.S. troops will “continue to conduct partnered counter terrorism operations to maintain pressure on extremist terrorist networks,” said chief spokesman Major General Stephen Lanza.

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U.S. troop numbers will fall to 50,000 on September 1 from around 77,000 now. Bases are closing, hardware going to Afghanistan and units flying home without replacement.

In disputed territories adjacent to Iraq’s semi-autonomous Kurdistan region, where Arabs and Kurds wrestle over land and power, insurgent cells have regrouped after being driven out of much of Iraq’s Sunni heartland.

Here, U.S. soldiers will still occasionally shoot, and be shot at after September 1.

Al Qaeda “is down but not out,” said U.S. forces Division North commander Major General Tony Cucolo. “We take down a cell, but on a smaller, less capable level it re-forms.”

The threat “can’t be handled” by Iraqi Security Forces “as they are,” he said on a Blackhawk helicopter flight over Diyala.

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The response to the Jalawla attack on June 11 provides a snapshot of the challenges and frustrations that confront U.S. forces often playing second fiddle to their Iraqi counterparts.

While U.S. special forces successfully hunted down at least one suspected insurgent, Iraqi police failed to turn up for a 6 a.m. (0300 GMT) roadside rendezvous on the last day of a two-week search operation across Jalawla.

They began without U.S. support and found nothing.

“We’re supposed to clear the whole town, but they never find anything,” said Lieutenant Jan Dudzinski, 26, seeking shade in the desert as his platoon provided a “cordon” for the operation named Jalawla Peacemaker. Trust between the two forces is low.

“The planning, the way they do it, doesn’t work,” said Sergeant Jeremy Hare, a 32-year-old veteran of four Iraq tours. “They get bored of it and don’t clear as well.”

As other bases close, Forward Operating Base Cobra in Diyala will remain at the same strength beyond Sept 1.

U.S. soldiers will continue to man checkpoints with Iraqi army and Kurdish Peshmerga forces, an exercise in cooperation which some observers say might not survive a U.S. departure.

A recent spike in violence, with mortar rounds lobbed at FOB Cobra and nearby Checkpoint Three, had reinforced the need for a robust U.S. presence, said Major Robert Halvorson, who drafted the military’s report into the Jalawla attack.

The insurgents were perhaps trying to exploit a political paralysis in the capital, where Sunni, Shi’ite and Kurdish political factions have yet to form a government almost four months after an election, officers said.

“By all their activity here they’re actually drawing us here,” said Halvorson, “and this is where we’re going to fight them so people don’t have to fight them in Baghdad.”