'We could lose this situation'

· CIA says insurgents now 50,000 strong

· Crisis talks over transfer of power

Julian Borger in Washington and Rory McCarthy in Baghdad

Thursday November 13, 2003

The Guardian

The White House yesterday drew up emergency plans to accelerate the transfer of power in Iraq after being shown a devastating CIA report warning that the guerrilla war was in danger of escalating out of US control.

The report, an "appraisal of situation" commissioned by the CIA director, George Tenet, and written by the CIA station chief in Baghdad, said that the insurgency was gaining ground among the population, and already numbers in the tens of thousands.

One military intelligence assessment now estimates the insurgents' strength at 50,000. Analysts cautioned that such a figure was speculative, but it does indicate a deep-rooted revolt on a far greater scale than the Pentagon had led the administration to believe.

An intelligence source in Washington familiar with the CIA report described it as a "bleak assessment that the resistance is broad, strong and getting stronger".

"It says we are going to lose the situation unless there is a rapid and dramatic change of course," the source said.

"There are thousands in the resistance - not just a core of Ba'athists. They are in the thousands, and growing every day. Not all those people are actually firing, but providing support, shelter and all that."

Although, the report was an internal CIA document it was widely circulated within the administration. Even more unusually, it carried an endorsement by Paul Bremer, the civilian head of the US-run occupation of Iraq - a possible sign that he was seeking to bypass his superiors in the Pentagon and send a message directly to President George Bush on how bad the situation has become.

Proof of the strength of the insurgents and their ability to strike anywhere in Iraq was provided in another devastating suicide bombing yesterday.

This time the target was the Italian military police barracks in the south-eastern city of Nasariya.

At least 17 Italians and eight Iraqis were killed, striking a blow at one of the few nations prepared to send troops to help the US and Britain contain the rising violence.

Following crisis talks in Washington yesterday, Mr Bremer flew back to Baghdad armed with proposals to bolster the US-backed Iraqi governing council with more powers and more resources in an attempt to speed up elections.

Under one of the proposals, the council could be expanded or transformed into a full provisional government backed by an interim constitution.

That would represent a radical reversal of earlier US policy which was to put off the transfer of real power to an Iraqi government until after elections, which in turn would have to await a comprehensive new constitution.

The new blueprint, which reverses that methodological progression and which is closer to what was done in post-war Afghanistan, emerged from an urgently arranged series of meetings between the president, his top national security advisers, and Mr Bremer, as the security situation in Iraq continued to deteriorate rapidly.

In scenes last night reminiscent of the height of the war, US forces went back on the offensive with air strikes and armoured assaults on a suspected guerrilla stronghold near Baghdad. Guerrilla attacks, meanwhile, have become more frequent, bolder and bloodier.

In public at least, the defence secretary, Donald Rumsfeld, has insisted that the attacks are the work of a few remnants of Saddam Hussein's Ba'athist party and a handful of Islamic jihadists from other Arab countries.

It is understood that Mr Bremer's administration is concerned about the impact of the decision by US forces to escalate their offensive against the insurgents, anxious that bombing and heavy-handed raids will increase popular support for the insurgency.

Mr Bremer refused to provide details of the new US plan, but US and British officials said he was carrying proposals from Mr Bush aimed at bolstering the interim Iraqi leadership in the hope of winning the confidence of Iraqis and paving the way for elections pencilled in for the end of next year. But, according to some US officials, elections could be held in four to six months.

The UN security council has given the Iraqi governing council until December 15 to come up with a constitutional blueprint and organising elections.

The council, deeply divided by internal disputes, has shown little sign of meeting that deadline, but the new US proposals would put it under pressure to accelerate its work and the transfer of power.

One of the options discussed in the White House yesterday was replacing the governing council with a new body.

The council was hand-picked by Washington after the war, largely from returning exiles, but it has since disappointed US officials by its slow progress. Many of its 24 members fail to turn up to its meetings, and the CIA report said the council had little support among the Iraqi population.

However, the secretary of state, Colin Powell insisted: "We are committed to the governing council and are prepared to help them in any way we can."

"We're looking at all sorts of ideas, and we do want to accelerate the work of reform," Mr Powell said.

"We want to accelerate the work of putting a legal basis under the new Iraqi government and we are doing everything we can to get the governing council equipped with everything they need."

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