The United States should withdraw forces from combat and engage with Syria and Iran to prevent "a slide toward chaos" in Iraq, an elite US advisory group recommended today.
The Iraq Study Group also urged Washington to reduce its political, military or economic support if Iraq's government fails to advance security and reconciliation in the country, where, almost four years after the US intervention, there is rampant sectarian violence.
The influential, bipartisan group offered a pessimistic assessment of circumstances in Iraq and painted a nightmare scenario spreading unrest across the region if the US fails to stabilise the country.
Among its unanimous recommendations, the group called for the White House to overcome its resistance to dealing directly with Iran and Syria, whom US officials accuse of fomenting the Iraqi insurgency, and to press for a "comprehensive Arab-Israeli peace" to settle that festering conflict.
US President George W Bush said he would take the much-anticipated report "very seriously" after he met the group but the White House said he will not be bound by its recommendations.
"The situation in Iraq is grave and deteriorating," the five Republicans and five Democrats in the group said of the war, in which more than 2,900 US troops have died.
"There is no magic formula to solve the problems."
The group called for a diplomatic push to begin by the end of the year and recommended the US military strengthen its effort to train Iraqi forces by increasing the number of US forces engaged in such work to 20,000 from about 4,000.
"The primary mission of US forces in Iraq should evolve to one of supporting the Iraqi army, which would take over primary responsibility for combat operations," it added.
While it set no fixed timetable for the transition, the report said that by the first quarter of 2008 US combat troops not needed for "force protection" could be out of Iraq, depending on security conditions in the country.
Former Representative Lee Hamilton, who co-chaired the group with former secretary of state James Baker, suggested events are slipping away from the United States.
"The current approach is not working and the ability of the United States to influence events is diminishing," Mr Hamilton bluntly told a news conference.
"No course of action in Iraq [is] guaranteed to stop a slide toward chaos."
Mr Bush has been under acute political pressure to change course in Iraq since the November 7th elections, when the failure Iraq led voters to end Republican control of Congress.
"This report gives a very tough assessment of the situation in Iraq," Mr Bush said after meeting with the group. "I told the members that this report, called 'The Way Forward,' will be taken very seriously by this administration."
Analysts suggested that the report would add to pressure on Mr Bush to find a solution to a conflict that has already lasted longer than the US involvement in World War Two.
"This could provoke an earthquake and leave the president very isolated if he refuses to change course," said Jon Alterman of the Centre for Strategic and International Studies in Washington.
The 10 members of the group met with Mr Bush for around an hour this morning.
"We're not here to vex and embarrass," former Wyoming Republican Senator Alan Simpson (75) who was a close ally of the president's father, told Mr Bush.
Referring to the age profile of the panel, co-chairman James Baker called said his "bunch of has-beens" had a clear message.
"We do not recommend a stay-the-course solution. In our opinion that approach is no longer viable," Mr Baker told reporters afterward.
Military analysts said the proposal to pull troops back into their bases would reduce American casualties but would remove one of the last checks on the rampant tit-for-tat violence between Sunnis and Shi'ites.
Stephen Biddle of the US Army War College Strategic Studies Institute warned: "If we were to withdraw to bases, the intensity of the civil war is going to increase dramatically.
"I think the recommendations are meaningless because they will depend on the response of the insurgents and sectarian factions."