Iraq
As it did last year, Iraq will again dominate the Pentagon’s agenda for 2008.
If the surge proves successful in reducing the level of violence, a gradual drawdown of American forces will continue through the spring. Gen. David Petraeus is concerned however that too rapid a drawdown could jeopardize what security gains have already been made, so don't expect to see the level of troops dip much below 140,000 troops, which is still more than the pre-surge level at the beginning of 2007.
Pentagon and military officials will also be negotiating an agreement with the Iraqi government, setting the ground rules of a long-term, but smaller, U.S. military presence in Iraq, well beyond 2008.
Pentagon and military officials fear that the predominately Shiite Iraqi government led by Prime Minister Maliki remains "too sectarian" and hold out little hope for any major political reconciliation between Shiites and Sunnis at the national level. U.S. officials do predict more of the kind of "bottom up" political progress seen at the local level during the past year.
Afghanistan
Concerns over the increased violence have Pentagon and military officials concerned that Afghanistan could be "slipping away."
Military officials are looking at a more aggressive military strategy in Afghanistan while Defense Secretary Robert Gates is pressing NATO to live up to earlier commitments to provide money, manpower and helicopters to the fight.
Senior Pentagon officials will also be pushing for a far more aggressive strategy to eradicate Afghanistan's poppy crop and reduce the nation's heroin production, the largest in the world and a tremendous source of income for the Taliban and corruption within the Afghan government.
Pakistan
Despite $7 billion in U.S military aid in 2007, the Pakistan military has been unable, if not unwilling, to drive the Taliban and al-Qaida out of the safe havens in the tribal regions of western Pakistan. Senior Pentagon officials will propose that U.S. military forces be sent into Pakistan as "advisors" to train Pakistani forces and help plan military operations against enemy forces in the west.
U.S. forces
As stressed out as the forces may be by multiple and extended combat tours in Iraq and Afghanistan, there appears to be little chance for relief for them or their families. In an exclusive interview with NBC News in Iraq in December, Defense Secretary Gates said it would be at least until the fall of 2008 before he could consider ending those 15-month tours for all Army troops in Iraq.
Given the political climate in the 2008 election year, the Democrat majority in Congress will continue to make the Bush administration, the Pentagon and the military sweat for every dollar in military spending for combat operations in both Iraq and Afghanistan. But that same political motive will also drive up spending for military benefits, particularly for wounded veterans.
Exit strategy
As the end of President Bush's final term in the White House draws near, administration officials in the Pentagon are acutely aware that their overall success or failure will be largely determined by the conditions they leave behind in both Iraq and Afghanistan.
Sources tell NBC News that since anything that could be considered "victory" is well beyond reach in either war in 2008, Gates is determined to lay out a path for military and political progress in both countries. The sources describe Gates as being "realistic" about the prospects for achieving total stability in either Iraq or Afghanistan, and instead has set his sights on handing the next administration, Democrat or Republican, a situation that could at least be considered "manageable" considering today's security challenges and threat.
Jim Miklaszewski is NBC News' Chief Pentagon correspondent based in Washington, D.C. Click here to see his predictions for 2007 and how they turned out.