Washington (CNN)-Defense Secretary Robert Gates discussed triumphs and trials in Iraq Sunday on CNN's "State of the Union."
"I am worried about Iranian influence (in Iraq)," he revealed. But, "We have taken a real toll on (al Qaeda) over the last two years."
Gates described a commitment to Iraq in the form of a "residual American presence" beyond December 2011 to "train" and "participate in counterterrorism."
"The truth is most of our kids who have been killed recently have been killed by extremist Shia groups," he said. "Not by al Qaeda in Iraq, but by extremist Shia groups. And they are clearly getting some sophisticated and powerful weapons from Iran."
Although al Qaeda is "significantly weakened" following the death of Osama bin Laden, according to Gates, the future of the terrorist group depends on "whether (Ayman al-) Zawahiri, the new leader taking bin Laden's place, can hold these groups together in some kind of a cohesive movement, or whether it begins to splinter."
"And we just don't know that yet," he said.
What is clear for Gates is the importance of protecting the U.S. military, and the impact that possible budget cuts will have on that force.
"We need to be honest with the president, with the Congress, with the American people…about what those consequences are," he said. "A smaller military, no matter how superb, we'll be able to go fewer places and be able to do fewer things."
Gates believes that military training and programs for the families of service members should be exempt from budget cuts, and he warned of the dangers of across-the-board cuts, which he said have the effect of making everything "mediocre."
"The United States has been a global power since late in the 19th century," he asserted.
"We have interest, we have allies, we have partners. And we find there's a bad history. When we turn inward, we end up in a really big war."
Watch State of the Union with Candy Crowley Sundays at 9am ET. For the latest from State of the Union click here.