Navy Adm. Mike Mullen also discussed his outlook on past and present U.S. humanitarian relief missions in a Pentagon Channel podcast interview.
Mullen praised the bilateral dialogue between the U.S. and Iraq, where Secretary of State Condoleezza Rice paid a one-day visit last month to discuss the status of forces agreement with Iraqi counterparts.
"There's actually great debate about this right now, and I think that's pretty healthy," Mullen said.
Iraqi Prime Minister Nouri al-Maliki has expressed the desire for Iraqi sovereignty and independence, which the United States encourages, Mullen said.
"That's one of the things that we've encouraged as his burgeoning democracy comes forward," he said.
The deadline for a United Nations mandate allowing the U.S. and Iraq to negotiate a status of forces deal is Dec. 31, after which American forces may not legally remain in Iraq without an agreement in place.
"We really need to make sure that that agreement is in place," Mullen said. "And from my view -- while certainly it's not done, because people are still working it -- it's all headed in the right direction."
Meanwhile, coalition forces handed over provincial control of Anbar province to Iraqis this week, a development that Mullen said indicates continued security improvement.
"Two years ago, not many of us would have thought that possible," he said, referring to the handover of what formerly was one of the most violent regions of Iraq. "I'm hopeful we can move forward and continue to reduce our force levels there."
On humanitarian relief, Mullen said the U.S. military's flexibility enables it to intervene swiftly in the wake of natural or other disasters.
"It says a lot about what our capability is, what our flexibility is, and also our presence, our engagement around the world, because we've been able to respond very quickly, typically by air and by sea," he said.
The chairman added that the average servicemember engaged in a relief effort later describes it as a source of pride.
"Typically, they tell you that they've never been prouder of carrying out a mission than when they were able to carry out this kind of humanitarian mission and disaster relief," he said.
Mullen cited the U.S. relief roles following earthquakes in China and Pakistan, and a humanitarian mission after a cyclone hit Burma and a tsunami struck Indonesia.
"It's the kind of engagement and support that has an impact not just in the disaster, but has an impact on the long-term relationships," he said, citing the United States' ongoing mission in Georgia as an example.
"I think it says a lot about the United States military," Mullen said, "and a lot about the United States of America: that we care, that we are engaged in a way that has a positive impact on lives."