The 64-year-old Serbian-born coach, in charge of his eighth national side, proved he has lost none of his entertainment value when he said he was happy despite losing the Group A Confederations Cup match to the European champions.
"I am very, very happy with the defeat, I am not only happy I am delighted. I was very happy with the way my team played and I am very pleased we did not lose by four goals.
"We played very intelligently, but Spain are Spain, they are a great team, but I have to say I am happy with the outcome. We are still in the competition.
"In the first game it is important not to lose, in the second game it is important to get the best possible result and we did that today. Maybe we can go through to the semi-finals with only two points. It is possible."
ULTRA-CAUTIOUS
Iraq drew their opening match 0-0 with South Africa and, despite losing this game, they will go into their last match against Oceania champions New Zealand with a chance of qualifying for the last four, no matter what the outcome of the South Africa-New Zealand match later on Wednesday.
"My team was very disciplined today, very organised and I was very pleased with them," Milutinovic added.
They were also ultra-cautious, very defensive, hardly had a shot or attack to speak of, and played with nine men behind the ball after Milutinovic named six defenders in his starting lineup.
However they could not stop David Villa scoring the only goal of the game to give Spain their world-record equalling 14th successive victory.
They are now also one match away from equalling Brazil's record of 35 unbeaten games.
Spanish coach Vicente Del Bosque, like Milutinovic, was also happy with the outcome which took his to the semi-finals after beating New Zealand 5-0 in their opening game.
"Iraq played with a lot of dignity. They played a smart game and played to their limits and made it very diffuclt for us today. It was never going to be the same game as against New Zealand with a big scoreline, but I am very pleased with the way we played today," he said.
"I am happy because we have achieved our first goal of reaching the semi-finals and have done that in the first two matches. Now I should be able to rest some players for the South Africa match and plan for the rest of the tournament."
Villa's goal -- his fifth in just over a week for Spain -- took his international tally to 30 and he became Spain's second highest scorer behind Raul who has 44.
Asked how he rated Villa among the world's best strikers Del Bosque replied: "He could play in any team in the world, but I don't know what his transfer value would be. I don't know anything about the economy."
