In a new assessment of Iraq they acknowledged as “pretty sober,” senior Pentagon officials sketched out a bloody landscape Friday of sectarian violence spreading beyond Baghdad and execution-style assassinations and terrorist bombings by increasingly entrenched private militias and death squads. “This is probably the most complex combat environment we have seen since the war began,” said Rear Adm. William Sullivan, the top strategic planner for the Joint Chiefs of Staff.

The severity and breadth of the Defense Department report, which is required four times a year by Congress, appeared to undercut recent statements by President Bush and Defense Secretary Donald Rumsfeld that conditions in Iraq are difficult but that steady progress is being made and that, as Rumsfeld put it Tuesday, “The question isn’t whether we can win. It’s whether we have the will to persevere to win.”

“This is a report that provides a good deal more realism” than recent administration statements, said Anthony Cordesman, senior analyst at the Center for Strategic and International Studies.

“In truth, it’s not a matter of American will that determines whether we win or lose in Iraq, but Iraqi governance, and the most we can do is to support and encourage that effort.”

The grim thrust of the report underscores that even with the establishment of an elected Iraqi government under a new constitution, chaos and bloodshed have only increased, driving growing numbers of families from their homes and jobs.

In the period covered by the assessment, roughly mid-May through mid-August, the number of weekly attacks on civilians rose 15 percent over the previous three-month period, while Iraqi casualties grew an astounding 51 percent.

Sunni and Shiite groups, including al Qaeda in Iraq and Shiite cleric Muqtada al-Sadr’s Mahdi Army, “are increasingly locked in retaliatory violence and are contesting control of ethnically mixed areas to expand their existing areas of influence,” the report said.

“Death squads and terrorists are locked in mutually reinforcing cycles of sectarian strife,” it stated, creating “increasing numbers of internally displaced persons,” or refugees.

Full article here. What complicates the situation is that Grand Ayatollah Ali al-Sistani, the most influential moderate Shi’ite in Iraq who has attempted to throw his influence behind supporting the U.S. rebuilding effort and the new Iraqi government, is now shrugging his shoulders:

The most influential moderate Shia leader in Iraq has abandoned attempts to restrain his followers, admitting that there is nothing he can do to prevent the country sliding towards civil war.

Aides say Grand Ayatollah Ali al-Sistani is angry and disappointed that Shias are ignoring his calls for calm and are switching their allegiance in their thousands to more militant groups which promise protection from Sunni violence and revenge for attacks.

“I will not be a political leader any more,” he told aides. “I am only happy to receive questions about religious matters.”

It is a devastating blow to the remaining hopes for a peaceful solution in Iraq and spells trouble for British forces, who are based in and around the Shia stronghold of Basra.

The cleric is regarded as the most important Shia religious leader in Iraq and has been a moderating influence since the invasion of 2003. He ended the fighting in Najaf between Muqtada al-Sadr’s Mehdi army and American forces in 2004 and was instrumental in persuading the Shia factions to fight the 2005 elections under the single banner of the United Alliance.

However, the extent to which he has become marginalised was demonstrated last week when fighting broke out in Diwaniya between Iraqi soldiers and al-Sadr’s Mehdi army. With dozens dead, al-Sistani’s appeals for calm were ignored. Instead, the provincial governor had to travel to Najaf to see al-Sadr, who ended the fighting with one telephone call.

Full article here.  His departure, if authentic, leaves the field open for the radicalism of al-Sadr.