A personnel shortage is creating a "clear danger" that the military will be unable to maintain its commitments in the near future, MPs have warned.
MPs warned that future wars might be harder to fight
The Commons Defence Committee said the services also lacked some of the equipment they needed.
Such problems could affect morale and readiness to "fight the next war".
The Tories said the report showed the military was "overstretched" but ministers insisted current missions were "sustainable".
The Ministry of Defence said its commanders believed they had the manpower they needed to cope.
'Widely held view'
With major deployments in Iraq, Afghanistan and the Balkans, and forces working in a total of 28 countries, the committee found the services were operating "in insufficient numbers and without all the equipment they need".
The Chief of General Staff, General Sir Richard Dannatt, had been "reflecting a view widely held in the armed services" when he said that relations between the armed forces and the government could be undermined if current levels of commitment were maintained.
The committee, which looked at the Ministry of Defence's annual report for 2005-06, also called on the MoD to produce evidence to support its assessment that it is "on course" to achieve objectives in Iraq and Afghanistan.
The MoD has declined to release its analysis for security reasons.
The committee found all three services were breaching "harmony" guidelines designed to ensure personnel get recuperation and training.
"Whether UK armed forces are stretched or overstretched is a matter for continued debate," the report said.
"What is certain is that they are operating in challenging conditions in insufficient numbers and without all the equipment they need.
"With problems of undermanning continuing, there is a clear danger that the armed forces will not be capable of maintaining current commitments over the medium term."
The MPs added: "It is clear that the current level of commitments is impacting on training.
"Over time this will impact on military effectiveness and on the armed forces' ability to 'fight the next war', which could present entirely different challenges."
The committee raised concerns about equipment shortages - particularly the availability of serviceable battlefield helicopters in Iraq and Afghanistan and air transport to ferry troops to and from these theatres.
But there was "no evidence that reported overstretch has led to a mass exodus" of personnel.
The MoD's planning assumptions, on which the manning requirement is based, envisage one medium-scale and two small-scale operations at a time.
The forces have been operating well above this level for some time without any adjustment in assumptions, said the committee.
Committee chairman James Arbuthnot said: "Our service personnel always rise to the challenges that they are set, but that should not lead us to take them for granted."
Shadow Defence Secretary Liam Fox said: "If we damage the morale of our troops by over-deploying them in this way and then on top of that adding insult to injury on their allowances it's much more difficult to retain them in the services."
Mr Blair had promised to "deliver whatever package the armed forces want," he added.
"If his word means anything, then he must address the mismatch between our military commitments and the decrease in our frontline capabilities," said Dr Fox.
The MoD said the committee had found its overall performance was satisfactory and had commended efforts to improve the retention of armed forces personnel.
It added in a statement: "The MoD is keenly aware of the burdens which operations place on our people and, although the current level of operational activity is higher than planned, it is sustainable.
"Commanders are content that the armed forces can cope with the current level of military commitments."
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