Sectarian slaughter rages in Baghdad and religiously mixed areas, carried out by shadowy militias and death squads believed linked to Shiite and Sunni politicians and clerics. Prime Minister Nouri al-Maliki has done little to curb the militias — some linked to his fellow Shiite allies.
In the dusty towns of Anbar province, Sunni Arab insurgents ambush American and Iraqi forces daily. An estimated 100,000 Iraqis flee the country every month to escape the violence, according to the Washington-based Refugees International. The U.S. death toll neared 3,000 in December.
Gone is talk of "staying the course," a phrase which President Bush himself has disowned. Gone too is the hope that the mere establishment of a democratically elected government of national unity would be enough to stem the bloodshed.
Instead, a bipartisan commission, led by longtime Bush family friend James Baker, has described the situation as "grave and deteriorating" and warned that America's ability to influence events in this turbulent country "is diminishing."
Equally damning, the commission accused the Pentagon of significantly underreporting the level of violence. After nearly four years of war, the U.S. "still does not understand very well either the insurgency in Iraq or the role of the militias," the commission said.
The situation has become so desperate that some U.S. politicians believe the best course is to give up on a unified Iraq and partition the country along religious and ethnic lines — even though the idea finds little support among the majority of Iraqis.
That bleak reality is vastly different from what U.S. officials were hoping for a year ago.
With a new constitution ratified and a freely elected parliament in place, hopes ran high that 2006 would mark a turning point in the U.S. campaign to build a stable democracy on the wreckage of Saddam Hussein's dictatorship.
U.S. officials even spoke of reducing U.S. troop strength in Iraq below 100,000 by the end of 2006, and Iraq's national security adviser confidently assured reporters of a "sizable gross reduction" in American forces here.
Those hopes were dashed after Feb. 22 when Sunni Arab extremists blew up a sacred Shiite shrine in Samarra, a Sunni city north of Baghdad. That brazen attack outraged the country's long-suffering Shiite majority, which had endured suicide attacks, car bombings and assassinations by Sunni religious extremists, including al Qaeda in Iraq.
The Samarra blast triggered a wave of sectarian reprisal killings that has led many scholars and political analysts to conclude that the country is now in a low-intensity civil war — with the 140,000 U.S. troops caught in the middle.
In the wake of Samarra, Iraq's leading Shiite clerics, who had cautioned patience during years of vicious sectarian attacks, could no longer curb the tide of Shiite retribution.
The bombing and the frenzied vendetta that followed also sabotaged American efforts to promote trust among Sunni Arab, Shiite and Kurdish politicians at a critical moment. Iraq's leaders were just beginning the process of forming a government of national unity after the December parliamentary elections.