Iraq report 'is no magic formula'

But the Iraq Study Group (ISG) report also says that not all options have been exhausted, and urges talks with Iran and Syria.

While endorsing the need for a policy shift, it stops short of a firm timetable for a troop pullout.

President Bush said the report would be taken "very seriously" and pledged to "act in a timely fashion".

It brings a "tough assessment" and "some really very interesting proposals," he said.

Washington has so far refused to hold direct talks with Iran and Syria.

The report also calls for renewed US efforts to resolve the wider conflict in the Middle East.

'Humanitarian catastrophe'

Correspondents say the review offers no big surprises and no quick fixes.

Co-chairman Lee Hamilton told reporters the situation in Iraq was grave and deteriorating, but there was still hope.

KEY SUGGESTIONS

• Primary mission of US forces should evolve to one of supporting Iraqi army
• By first quarter of 2008... all combat brigades not necessary for force protection could be out of Iraq
• US must not make open-ended commitment to keep large numbers of American troops deployed in Iraq

Excerpts from the report

Iran influence limited

Syrians delighted

"Our ship of state has hit rough waters - it must now chart a new way forward," he said.

The 142-page report includes 79 recommendations, of which three are key:

• A change in the primary mission of US forces in Iraq to enable it to begin to move combat forces out responsibly
• Prompt action by the Iraqi government to achieve reconciliation
• New and enhanced diplomatic efforts in the region

The other co-chairman of the bipartisan panel, former US Secretary of State James Baker, said a strategy of staying the course in Iraq was no longer viable.

The report offers no hard timetable for a pullout of US forces, but says that combat troops could withdraw by early 2008.

However, the review recommended that the US "engage directly with Iran and Syria", and that Washington should "consider incentives and disincentives" for the two nations.

"Given the ability of Iran and Syria to influence events within Iraq and their interest in avoiding chaos in Iraq, the US should try to engage them constructively," it says.

Speaking ahead of the report, Syria repeated its willingness to co-operate with the US, and said it was in Syria's interest to help Iraq.

But correspondents say the president appears unlikely to heed the call for more engagement with Syria and Iran, amid efforts by the administration to isolate both states.

The report also raises the consequences of continued decline in the situation in Iraq.

It warns that if the situation worsens, there is a risk of a "slide toward chaos (that) could trigger the collapse of Iraq's government and a humanitarian catastrophe".

"Neighbouring countries could intervene... The global standing of the United States could be diminished. Americans could become more polarised," it warns.

Panel member Leon Panetta said the US "cannot be at war and be as divided as it is today - we have got to unify this country".

Dozens interviewed

The 10-member panel has been working since April to come up with recommendations.

HAVE YOUR SAY
"The damage has already been done and now ordinary Iraqis have to live with the mess "
Daniel, London

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The ISG has met or spoken to more than 170 individuals, including Iraq's leaders, President Bush, UK Prime Minister Tony Blair, ambassadors and other senior officials from among Iraq's neighbours and the US.

Hundreds of others have fed their suggestions to four working groups, which have written analytical papers for the panel's benefit.

Mr Blair arrived in Washington on Wednesday for a visit which will include meetings with President Bush and congressional leaders.