Ambassador Ryan Crocker did not say that construction would stop, adding he is unsure where discussions stand on the issue.
Crocker emphasized to reporters that the wall is aimed at protecting the Sunni community, not segregating it.
Iraqi Prime Minister Nuri al-Maliki announced on April 22 that he had ordered a halt to construction after the project drew strong criticism from residents and Sunni leaders.
It was Crocker's first news conference since arriving in Baghdad in March.
"The road is going to be a tough one," Crocker said. "I don't begin my tour here with any illusions. It is going to be very, very difficult, but I certainly believe that success is possible. Otherwise, I wouldn't be standing here."
He urged the Iraqi government to make use of a U.S.-backed security plan in the capital to move forward on reconciling Iraq's warring communities.
Crocker said the months ahead will be "critical."
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