Despite some uneven improvements, the analysts concluded that the level of overall violence is high, Iraq's sectarian groups remain unreconciled, and al Qaeda in Iraq is still able to conduct highly visible attacks.
"Iraqi political leaders remain unable to govern effectively," the 10-page document, a declassified summary of a more detailed National Intelligence Estimate, concludes.
, R-Va., just back from Iraq, said U.S. soldiers are now fighting for a failing government, reports CBS News correspondent Bob Orr.
"I really firmly believe that the Iraqi government, under the leadership of Prime Minister Maliki, have let our troops down," says Warner, former chairman of the Senate Armed Services Committee.
The report represents the collaborative judgments of all 16 U.S. intelligence agencies, including the CIA, Defense Intelligence Agency and the intelligence organization of each military service. It comes at a time of renewed tensions between Washington and Baghdad, and as the Bush administration prepares a mid-September report on how its troop buildup in Iraq is working.
"Every day that we continue to stick to the president's flawed strategy is a day that America is not as secure as it could be," said Reid, a Nevada Democrat.
The estimate says that Iraqi Security Forces, working alongside the United States, have performed "adequately." However, it says they haven't shown enough improvement to conduct operations without U.S. and coalition forces and are still reliant on others for key support.
"All of Iraq's political leaders are more interested in advancing their narrow sectarian or party interests than in the national interest," Bruce Riedel of The Brookings Institution told Orr.
The intelligence report notes some military successes, reports Orr. Regional Sunni leaders are turning against al Qaeda. The number of attacks is down.
The White House seized on the good news.
"The National Intelligence Estimates updated judgments show that our strategy has improved the security environment in Iraq but that we still face very tough challenges ahead, says Gordon Johndroe, spokesman for the White House National Security Council.
But experts warn that as the Maliki government struggles, Iraqis are beginning to lose faith. And there are militant factions just waiting for America's withdrawal, reports Orr.
The findings could provide support for the Bush administration's argument that coalition forces need to stay in Iraq in order to avoid letting security lapse, should they withdraw from certain areas.
The report predicts that the Iraqi government "will become more precarious over the next six to 12 months" because of criticism from members of Iraqi Shiite parties, Iraq's top Shiite religious figure Grand Ayatollah Ali al-Sistani, and Sunni and Kurdish factions.
The assessment also expresses deep doubts that the government of Prime Minister Nouri al-Maliki can overcome sectarian divisions and meet benchmarks intended to promote political unity. It finds that Shiite factions have looked at ways to constrain him.
"The strains of the security situation and absence of key leaders have stalled internal political debates, slowed national decision-making, and increased Maliki's vulnerability to alternative coalitions," the document says.
But the assessment says al-Maliki will continue to benefit from the belief among Shiite leaders that "searching for a replacement could paralyze the government."
CBS News correspondent Tara Mergener reports tension is growing between President Bush and the prime minister after Mr. Bush appeared to back away from al-Maliki earlier this week when he said: "Clearly, the Iraqi government's got to do more."
But, and an administration official said Thursday that, despite the assessment of the limitations of the current government, there is no talk at the White House of a need for change in the Iraqi leadership.