In a highly classified National Intelligence Estimate, the council looked at the political, economic and security situation in the war-torn country and determined that — at best — stability in Iraq would be tenuous, a U.S. official said late Wednesday, speaking on the condition of anonymity.
At worst, the official said, were "trend lines that would point to a civil war." The official said it "would be fair" to call the document "pessimistic."
The intelligence estimate, which was prepared for Mr. Bush, considered the window of time between July and the end of 2005. But the official noted that the document draws on intelligence community assessments from January 2003, before the U.S.-led invasion of Iraq and the subsequent deteriorating security situation there.
This latest assessment was performed by the National Intelligence Council, a group of senior intelligence officials that provides long-term strategic thinking for the entire U.S. intelligence community.
Acting CIA Director John McLaughlin and the leaders of the other intelligence agencies approved the intelligence document, which runs about 50 pages.
The estimate appears to differ from the public comments of Mr. Bush and his senior aides who speak more optimistically about the prospects for a peaceful and free Iraq. "We're making progress on the ground," Mr. Bush said at his Texas ranch late last month.
But there have been ample signs in recent weeks that the security situation might be deteriorating:
A CIA spokesman declined to comment Wednesday night.
The document was first reported by The New York Times on its Web site Wednesday night.
It is the first formal assessment of Iraq since the October 2002 National Intelligence Estimate on the threat posed by fallen Iraqi President Saddam Hussein.
A released this summer by the Senate Intelligence Committee found widespread intelligence failures that led to faulty assumptions that Iraq had weapons of mass destruction.
Disclosure of the new National Intelligence Estimate on Iraq came the same day that Senate Republicans and Democrats denounced the Mr. Bush administration's slow progress in rebuilding Iraq, saying the risks of failure are great if it doesn't act with greater urgency.
"It's beyond pitiful, it's beyond embarrassing, it's now in the zone of dangerous," said Sen. Chuck Hagel, R-Neb., referring to figures showing only about 6 percent of the reconstruction money approved by Congress last year has been spent.
Senate Foreign Relations Committee members vented their frustrations at a hearing during which State Department officials explained the administration's request to divert $3.46 billion in reconstruction funds to security and economic development. The money was part of the $18.4 billion approved by Congress last year, mostly for public works projects.
The request comes as between U.S.-led forces and Iraqi insurgents, endangering prospects for elections scheduled for January.
"We know that the provision of adequate security up front is requisite to rapid progress on all other fronts," Deputy Assistant Secretary of State Ron Schlicher said.
White House spokesman Scott McClellan said circumstances in Iraq have changed since last year. "It's important that you have some flexibility."
Hagel, Committee Chairman Richard Lugar, R-Ind., and other committee members have long argued — even before the war — that administration plans for rebuilding Iraq were inadequate and based on overly optimistic assumptions that Americans would be greeted as liberators.
But the criticism from the panel's top Republicans had an extra sting coming less than seven weeks before the U.S. presidential election in which Mr. Bush's handling of the war is a top issue.
"Our committee heard blindly optimistic people from the administration prior to the war and people outside the administration — what I call the 'dancing in the street crowd' — that we just simply will be greeted with open arms," Lugar said. "The nonsense of all of that is apparent. The lack of planning is apparent."
He said the need to shift the reconstruction funds was clear in July, but the administration was slow to make the request.
Before the war, Defense Department officials said the reconstruction of Iraq could be funded out of oil revenues. Civilian Pentagon leaders also disparaged then-Army chief of staff Gen. Eric Shinseki when he said several hundred thousand troops would be needed to secure Iraq after the invasion.
State Department officials stressed areas of progress in Iraq since the United States turned over political control of Iraq to an interim government on June 28. They cited advances in generating electricity, producing oil and creating jobs.