A new study by US intelligence agencies has cast fresh doubt about the ability of Iraqi Prime Minister Nouri Maliki to bring about political unity in Iraq.
The US intelligence report says Mr Maliki may not be able unify Iraq
The National Intelligence Estimate says the Iraqi government will become more fragile in the next six to 12 months.
The gloomy assessment comes as calls grow in the US for Mr Maliki to step down, though President George W Bush on Wednesday expressed support for him.
The study did however say US forces had made progress in curbing the violence.
The newly declassified document, the collective assessment of 16 US intelligence agencies, states bluntly that "Iraqi political leaders remain unable to govern effectively".
The 10-page document goes on to warn that the situation is likely to worsen further.
"The IC (intelligence community) assesses that the Iraqi government will become more precarious over the next six to 12 months because of criticism by other members of the major Shia coalition" as well as Sunni and Kurdish parties.
It also expresses grave doubts that Mr Maliki will be able to overcome sectarian divisions in Iraq and meet political benchmarks on unity.
"Levels of insurgent and sectarian violence will remain high and the Iraqi government will continue to struggle to achieve national-level political reconciliation and improved governance," the study said.
Unless there is "a fundamental shift in factors driving Iraqi political and security developments," the political compromises needed for "sustained security, long-term political progress, and economic development are unlikely to emerge," the report said.
The report did say that "Sunni resistance to al-Qaeda has expanded in the last six to nine months, but has not yet translated into broad Sunni Arab support for the Iraq government, or widespread willingness to work with the Shia".
A Sunni religious leader in the Iraqi province of Diyala who encouraged his community to confront al-Qaeda in Iraq was killed by the group on Thursday, police said.
The militants exploded a bomb in Sheikh Yunis al-Tai's house in the town of Kanaan, and fired mortars and rocket-propelled grenades at other houses and a Sunni mosque.
Along with the imam, they killed at least one of his family members and wounded others.
The intelligence agencies noted that there had been "measurable but uneven improvements" in Iraq's security since January, following the recent surge in US troop numbers, but that the level of violence remains high.
White House argument
The Iraqi Security Services have performed "adequately" alongside US forces but they are not capable of conducting operations without support from coalition forces, the study adds.
The report's release comes amid growing calls from senior Democrats in Washington for Mr Maliki to step down.
But, as Mr Bush seeks to make the case for US troops remaining in Iraq, the White House is likely to focus less on the political failings than on the security challenges, in particular the report's conclusion that Iraq's security forces are still unable to operate without outside help, the BBC's James Coomarasamy in Washington says.
Mr Bush has said Mr Maliki was a "good man with a difficult job"
Observers suggest the report could lend support to the Bush administration's argument that pulling out precipitously would lead to chaos and violent upheaval.
Mr Bush defended his Iraq policy on Wednesday, comparing current calls for withdrawal from Iraq with what happened at the end of the Vietnam War in 1975.
During a speech to veterans, he called Mr Maliki a "good man with a difficult job".
A progress report is due in mid-September from General David Petraeus, the top US commander in Iraq, on the effectiveness of the recent surge in US troop numbers in tackling the violence there.