Under the Pentagon's proposed budget, the cost of the wars in Iraq and Afghanistan will drop to $117.8 billion for fiscal year 2012, a reduction of 41.5 billion from the previous year.

As the US war effort winds down in Iraq, the budget sets aside $10.6 billion for "Operation New Dawn," with the remaining 50,000 US troops there due to withdraw by the end of 2011.

Spending for the Afghan mission calls for $107.3 billion, down slightly from the last budget, which requested $113.5 billion.

President Barack Obama has vowed to start a withdrawal in July of the roughly 97,000 troops now in Afghanistan.

The budget released Monday offered no insight into the scale of the planned drawdown, with the Pentagon's budget document assuming an average of 98,250 troops on the ground by the end of 2012.

Gates said the Pentagon had "decided to budget conservatively" as it was too soon to predict how many troops would be withdrawn after July.

"But that's not to say that we will have 98,000 troops at the end of FY 2012. In fact it's a lead pipe cinch we won't."

The budget for Afghanistan and Iraq includes $79.2 billion for operations, $10.1 billion to counter the threat posed by homemade bombs -- the main killer of NATO-led troops in the war.

Some $11.9 billion is devoted to repairing and replacing equipment lost or damaged and $12.8 billion for training and arming Afghan security forces, who are supposed to gradually take over security duties between now and 2015.

By October, the United States and NATO plans to expand the Afghan army to 172,000 soldiers and the police to 134,000 police.

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