Iraq has managed to reach only three out of 18 progress benchmarks set by the US, a draft of a key report seen by the Washington Post newspaper says.
The report questions the efficacy of the troop surge
The reported findings of the Government Accountability Office - a Congressional watchdog - contrast with a White House study saying eight goals have been met.
The targets were established to monitor Iraq's military and political progress.
"Key legislation has not been passed, violence remains high," is the report's bald assessment, the Post says.
The final 69-page report, which will be delivered to Congress on Tuesday next week, says a further two benchmarks have been "partially met".
According to the Washington Post, the official who provided them with the draft feared its "pessimistic conclusions would be watered down in the final version - as some officials have said happened with security judgments in this month's National Intelligence Estimate on Iraq".
The National Intelligence Estimate, the collective analysis of the situation in Iraq by 16 intelligence agencies which was declassified last week, cast fresh doubt about the ability of Prime Minister Nouri Maliki to bring about political unity in Iraq.
However, it did say that there had been "measurable but uneven improvements" in Iraq's security since January, following the recent surge in US troop numbers.
The Government Accountability Office report comes just weeks before General David Petraeus, head of US forces in Iraq, and Ryan Crocker, the US ambassador to Iraq, are due to deliver a full progress report to Congress, looking in particular at the effect of the surge.
"While the Baghdad security plan was intended to reduce sectarian violence, US agencies differ on whether such violence has been reduced," the Post quoted the watchdogs as saying.
All eyes will be on Gen Petraeus when he reports in September
The pessimistic assessment from the respected Congressional watchdog comes as a new study by a US think-tank says the US could safely withdraw most of its troops from Iraq within a year.
The study by the left-leaning Center for American Progress argues that the Pentagon should be planning for a 12-month deadline now.
President George W Bush says he will be guided by the advice of his generals and according to the BBC's Nick Childs in Washington the widespread assumption has been that the views of Gen Petraeus will be key.
However, Iraq's foreign minister, Hoshyar Zebari, has said he does not believe that the much-heralded report next month will provide any "magical solutions" to the challenges facing Iraq.
Mr Zebari acknowledged that the Petraeus-Crocker report would be very important and that the world was awaiting it anxiously, yet he was also clearly keen to caution against exaggerated expectations.
He accepted that in the past progress on the security front in Iraq had not been matched by political progress, but insisted that the degree of consensus reached by Shia, Kurdish and Sunni leaders last weekend, when they agreed a unity accord, meant a new phase was beginning.
Our correspondent in Washington says nobody disputes that next month will be critical for the current US surge strategy in Iraq and the debate in Washington is intensifying accordingly.
Perhaps to keep options open, our correspondent says, or as a sign that there may be differences among the US top brass, the Pentagon has now made it clear that Mr Bush will be hearing from a variety of top generals, including members of the joint chiefs of staff who were said to be ambivalent about the surge strategy in the first place.