WASHINGTON (By Fareed Zakaria, Newsweek) Nov. 20, 2006 — Press accounts of its deliberations suggest that the much-anticipated Baker-Hamilton report will make some intelligent recommendations. The committee will point out that America's strategy in Iraq must be placed in a broader regional context. For three years, America's Iraq policy has largely ignored the rest of the Middle East. That was no accident. The neoconservative vision was always that Iraq would be made anew, shorn of the flaws and ailments of the Arab world. Before the invasion, senior policymakers speculated that Iraq's postwar government would recognize Israel. "The road to Jerusalem runs through Baghdad," they were fond of saying. Immediately after the war, a senior international diplomat attached to the Coalition Provisional Authority was embarking on a trip to Iraq's neighbors, and he asked Paul Bremer what message to deliver to them. The answer: none. The region was the problem, not the solution.

This absence of a regional strategy left Iraq open to its neighbors' most irresponsible instincts. Iran and Syria have helped keep the violence there on the boil. Saudi groups and individuals have funded Sunni militants. None of the surrounding nations would benefit if Iraq actually did collapse, setting off territorial disputes, sending refugees into neighboring lands and exporting Iraq's instability. Such an outcome can still be avoided, but only with active support from these countries. The Baker-Hamilton commission can be expected to recommend a major regional effort.

The panel will also surely suggest intensive efforts to get the various groups in Iraq to forge a national compact. The elements of such a deal are clear—regional autonomy, a sharing of oil revenues, amnesty and the demobilization of armed groups or their incorporation into the Army. And this political settlement would go a long way toward reducing the violence in the country.

But if the commission stops there, it will have missed its moment. These recommendations are the easy ones, accepted by almost everyone but a few ideologues. Some are already being tried. The United States has been pushing hard to get the Iraqis to make a political deal. The administration has been talking more to the neighbors of late and has even made some small overtures to Iran.

That's not enough. Even if Iran and Syria actually agreed to help stabilize Iraq, there's no certainty that their efforts would bring dramatic changes to the country. The violence in Iraq has taken on a life of its own, and the entire structure of political authority has become fragmented and decentralized. If Prime Minister Maliki and Ayatollah Sistani cannot rein in the violence of their own fellow Shiites, is it likely that Iran and Syria could?

Here is the tough question: What are America's objectives in Iraq and how can we achieve them? More bluntly, what is to be done with the roughly 140,000 U.S. troops stationed there? What is their mission? If they have new goals, do these require more Americans or fewer? Not to tackle this issue is to present a doughnut document—all sides and no center.

In answering this question, we need to keep three factors in mind:

WASHINGTON (By Fareed Zakaria, Newsweek) Nov. 6, 2006 — By 1952, the last year of his presidency, Harry Truman recognized that the victory he had hoped for was no longer possible in Korea. U.S. forces were not losing, but they were not winning, either. Instead they were caught up in a vast, bloody and expensive holding operation. Two thirds of the American public disapproved of the war. Truman had hoped that peace talks, underway since July 1951, would yield results, but his team was negotiating under constraints. Republicans were eager to criticize the Democrats for being soft on the communists. Others, even Democrats, asked how they could justify the deaths of 50,000 U.S. troops without a clear win. Many, including South Korea's President Syngman Rhee, had not given up on the dream of a unified Korea that would be an ally in the war against communism.

Truman's successor, Dwight Eisenhower, as a legendary general, had enormous freedom to maneuver. He used it, ending new military offensives, conceding several key points to the North Koreans and the Chinese. By some accounts, he also threatened to use nuclear weapons. On July 27, 1953, the parties to the war signed a peace treaty—all parties, that is, except the South Koreans, who believed the deal amounted to a sellout.

For Americans, the Korean War was not a defeat—the United States had gathered a coalition to resist aggression—but it was certainly not a victory. After three years of fighting and 4 million dead, Korea remained divided—the North a communist bulwark, the South itself turning into a nasty dictatorship—Asia was bubbling over and the danger of war with the forces of international communism seemed greater than before.

Something like the close of the Korean War is, frankly, the best we can hope for in Iraq now. One could easily imagine worse outcomes—a bloodbath, political fragmentation, a tumultuous flood of refugees and a surge in global terrorist attacks. But with planning, intelligence, execution and luck, it is possible that the American intervention in Iraq could have a gray ending—one that is unsatisfying to all, but that prevents the worst scenarios from unfolding, secures some real achievements and allows the United States to regain its energies and strategic compass for its broader leadership role in the world.

But in order for that to happen, we have to see Iraq as it is now. Not as it once was. Not as it could have been. Not as we hope it will become, but as it is today. There will be ample time to assign blame and debate "what if's. The urgent task now is ahead of us.

"We're winning," President Bush said last week, and then explained his reasoning: "My view is that the only way we lose in Iraq is if we leave before the job is done." That circular definition of success resembles so much of the administration's Iraq policy, one that seems almost determined not to look at the country itself. Iraq, in this view, is a state of mind. If we lose faith, we lose. But there is a real country out there. And it is one in which events are increasingly moving beyond our control.

In point of fact—and it is a sad fact, but a fact nonetheless—America is not winning in Iraq, which means that it is losing. Iraq has fallen apart both as a nation and as a state. Its capital and lands containing almost 50 percent of the population remain deeply insecure and plagued by rising internal divisions. Much of the south, which is somewhat stable, is subject to gangsterish, theocratic and thoroughly corrupt local governments. To recognize this reality does not mean that there is no hope for the years to come. There is—but hope is not a policy.

Journalists have a weakness for declaring this moment or that one as "critical." But today, more than three years into the American-led invasion of Iraq, there is little question that we stand at, well, a critical moment. The policy we are pursuing—maintaining 144,000 U.S. troops in Iraq and hoping that things improve—is not sustainable either in Iraq or in America. President Bush has three tools at his disposal that he can (theoretically) apply to the mission at hand—more troops, money and time. At this point, none of these will make much difference.

But the way out of this stalemate is not to pack up and go home. That will surely result in a bloodbath or worse. The United States must redefine its mission, reduce and redeploy its forces and fashion a less intrusive involvement with Iraq, one that both Iraqis and Americans believe is productive and sustainable for the long term.

The most revealing statistic about Iraq is not the spiraling death toll but the unemployment rate, which is conservatively estimated to be around 30 to 40 percent, and has not moved much in the past two years. Given that conditions are almost normal in the Kurdish north, that means the rest of the country has an unemployment rate closer to 50 percent. Whatever we have been doing in Iraq, it is not translating into peace, normalcy and jobs. In parts of the Sunni Triangle, reports suggest that unemployment is more than 70 percent. If you think that Iraq's tumult is a product of its culture, religion and history, ask yourself what the United States would look like after three years of 50 percent unemployment. Would there not be civil strife in Manhattan, Detroit, Los Angeles and New Orleans?

The root cause of Iraqi unemployment is, of course, the lack of security, which is endemic in much of the country. In some places the vacuum has been filled by local forces—most effectively in Kurdistan by the peshmerga. In parts of the south, though—Basra among them—various Shia militias are battling each other for power. In Sunni areas, particularly Anbar province, former Baathist soldiers and a smaller group of Islamic terrorists continue to mount campaigns against U.S. forces and the new Iraqi Army. They intimidate and kill Sunni leaders who help the Iraqi government or work with the United States. Whenever U.S. forces scale back in an area, the attacks begin again. The violence in Iraq is being suppressed but not solved.

The most significant new reality in Iraq—in fact, the country's defining feature—is sectarian violence. By any reasonable definition, Iraq is mired in a low-grade civil war between its Sunni and Shia communities. Communal tensions are high, and rising—everywhere. Violence has been mounting in all areas where these communities are mixed. Ethnic cleansing, either forced or voluntary, is increasing rapidly, with 365,000 people having fled or been forced from their homes since last February's bombing of a Shia mosque in Samarra. In Baghdad alone more than 2,600 Iraqis died in September, most of them as a result of communal attacks.

Virtually everything about Iraq today must now be seen through this sectarian prism. President Bush says that we are building an Iraqi Army and police force and that as their troops stand up, America's will be able to stand down. In fact, we are building a largely Kurdish and Shia force. As its ranks have swelled, Sunnis have felt more threatened, not less, and as a consequence have fought harder. Shia militias, many of whose members are now enlisted in the Army and especially the national police, feel empowered. They have routinely rounded up groups of Sunni men and slaughtered them in gruesome fashion. Even the country's much-lauded elections have not proved an unmitigated good in this context. Last December's vote empowered religious parties with their own militias, such as Moqtada al-Sadr's Mahdi Army, and, as a result, made it more difficult to disband them.

Democratic Sen. Jack Reed of Rhode Island, a former Army paratrooper and one of the most intelligent voices on foreign affairs in the U.S. Senate, just returned from his ninth trip to Iraq, where he saw this tension between politics and progress. Six months ago, he noted, the Sunni town of Tall Afar, near the Syrian border, had been held up as an example of the success of Washington's new "clear, hold and build" strategy. Insurgents had taken over the town. The Third Armored Cavalry Regiment had repelled them, secured the streets and won over the local population. But the Shia-dominated government in Baghdad had since ignored all appeals for money for reconstruction (the "build" phase), which has meant few new jobs. Many Sunni areas complain of similar treatment from Baghdad. Tall Afar is now sliding back into instability. Thus a smart American strategy falls prey to the political realities in Iraq.

From the beginning of the war, the Bush administration has not wanted to think of Iraq in these sectarian terms, preferring instead to believe the country was the place it hoped it would be—united, secular, harmonious, freedom-loving. As a result, Washington massively underestimated the challenge it faced. By unseating Saddam Hussein and introducing democracy, the United States introduced Shia-majority rule to Iraq. It also disbanded the Army, with its largely Sunni officer corps, fired 50,000 mostly Sunni bureaucrats and shut down dozens of state-owned factories (many run by Sunnis). In effect, the United States destroyed both the old Iraqi nation and the old Iraqi state. And yet it had no plan, people or resources to fill the void left behind.

With all the troops in the world, America could not forge a new national compact for Iraq. That is a task for the Iraqi leadership. The outlines of the deal that needs to be made are by now obvious. Iraq would end up a loose confederation, but would divide its oil revenue so that all three regions were invested in the new nation. A broad amnesty would be granted to all those who have waged war, which means mainly the Sunni insurgents, but also members of Shia death squads. Government and state-sector jobs, the largest share of employment in Iraq, would be distributed to all three communities, which would entail a reversal of the postinvasion purges that swept up, for example, schoolteachers who happened to be members of the Baath Party. Finally, and perhaps most urgently, the Shia militias must be disbanded or, if that becomes impossible, incorporated and tamed into national institutions.

What is equally obvious is that such a deal does not seem to be at hand. The Shia leadership remains extremely resistant to any concessions to its former Sunni overlords. The Shia politicians I met when in Baghdad, even the most urbane and educated, seemed dead set against sharing power in any real sense. In an interview with Reuters last week, Prime Minister Nuri al-Maliki also said he believed that if Iraqi troops were left to their own devices, they could establish order in six months in Iraq. It is not difficult to imagine what he means: Shia would crush Sunni, and that would be that. This notion—that military force, rather than political accommodation, could defeat the insurgency—is widely shared among senior Shia leaders. Abdul Aziz al-Hakim, the head of the single largest political party in Parliament, has made similar statements in the past. While they will occasionally say the right things, as Maliki did in his first week in office, their reluctance to fund projects in Sunni areas, or to investigate death squads, suggests they have little appetite for broader national reconciliation.

The Sunnis, for their part, seem consumed by their own anger, radicalism and feuds. They remain so incensed with the United States for their loss of power that they have been, until recently, blind to the reality that if not for U.S. forces, they would be massacred. What political leadership the Sunnis have is weak and does not appear to have much leverage with the insurgents. There is no Sunni with whom to make a deal.

All sides in Iraq are preparing for the day the United States leaves. They are already engaged in a power struggle for control of the post-American Iraq. The Kurds have ensured that their autonomous region is governed essentially as a separate country with its own army. The largest Shia parties want to maintain their militias to bolster their own power base, independent of the state. And the Sunnis do not want to wind down the insurgency, for fear that they will be impoverished or killed in the new Iraq. Nobody believes that, after the Americans, this power struggle will be resolved with ballots. So they are all keeping their bullets.

If the United States were to leave Iraq tomorrow, it is virtually certain that the bloodletting would spread like a virus. American troops are effective at stopping shoot-outs among militias and the worst of the sectarian killings. But if there is no progress toward a lasting political resolution, all that those soldiers are doing is keeping the lid on tensions that will continue to grow. Thus Ramadi is captured by U.S. forces, which then leave, only to have to return and retake the city again. We might be able to pacify Baghdad, but will the calm last after the we leave? Even now, those places from which units have been drawn to control the capital, like Mosul, are reporting many more incidents of violence.

So what should the United States do? First of all, Washington has to make clear to the Iraqi leaders that its continued presence in the country at current troop levels is not sustainable without some significant moves on their part.

Iraqi leaders must above all decide whether they want America there. Perhaps the most urgent need is for them to help build political support for the continued deployment of U.S. forces. Right now the massive U.S. presence is allowing Iraq's leaders a free ride. With the exception of the Kurds, many of them play a nasty game. They publicly denounce the actions of U.S. soldiers to win popularity, and then, more quietly, assent to America's continued involvement. As a result, the proportion of Iraqis who now support attacks on U.S. troops has risen to a breathtaking 61 percent. The Iraqi people's frustration with the occupation is largely the result of its ineffectiveness, the lack of security and jobs, and abuses like Abu Ghraib. But those past errors cannot be undone. Iraqis must also realize that we are where we are, and that they can have either a country with U.S. troops or greater chaos without.

Iraq's Parliament should thus publicly ask American troops to stay. Its leaders should explain to their constituents why the country needs U.S. forces. Without such a public affirmation, the American presence will become politically untenable in both Iraq and the United States.

Next, Iraqis must forge a national compact. The government needs to make swift and high-profile efforts to bring the sectarian tensions to a close and defang the militias, particularly the Mahdi Army. The longer Iraqi leaders wait, the more difficult it will be for all sides to compromise. There are many paths to help Iraq return to normalcy; jobs need to be created, electricity supplied regularly, more oil produced and exported. But none of that is possible without a secure environment, which in turn cannot be achieved without a political solution to Iraq's sectarian strife.

There is one shift that the United States itself needs to make: we must talk to Iraq's neighbors about their common interest in security and stability in Iraq. None of these countries—not even Syria and Iran—would benefit from the breakup of Iraq, which could produce a flood of refugees and stir up their own restive minority populations. Our regional gambit might well lead to nothing. But not trying it, in the face of so few options, reflects a bizarrely insular and ideological obstinacy.

Unfortunately, there's a strong possibility that these changes will not be made in the next few months. At that point the United States should begin taking measures that lead to a much smaller, less intrusive presence in Iraq, geared to a more limited set of goals. Starting in January 2007, we should stop trying to provide basic security in Iraq's cities and villages. U.S. units should instead become a rapid-reaction force to secure certain core interests.

We can explain to the Iraqi leadership that such a force structure will help Iraqis take responsibility for their own security. Currently we have 144,000 troops deployed in Iraq at a cost of more than $90 billion a year. That is simply not sustainable in an open-ended way. I would propose a force structure of 60,000 men at a cost of $30 billion to $35 billion annually—a commitment that could be maintained for several years, and that would give the Iraqis time to come together, in whatever loose form they can, as a nation.

True, as we draw down, violence will increase in many parts of the country. One can only hope that will concentrate the minds of leaders in Iraq. The Shia government will get its chance to try to fight the insurgency its way. The Sunni rebels can attempt to regain control of the country. And perhaps both sides will come more quickly to the conclusion that the only way forward is a political deal. But until there is such a change of heart, the United States should stick to more limited goals.

The core national-security interests of the United States in Iraq are now threefold: first, to prevent Anbar province from being taken over by Qaeda-style jihadist groups that would use it as a base for global terrorism; second, to ensure that the Kurdish region retains its autonomy; third, to prevent or at least contain massive sectarian violence in Iraq, as both a humanitarian and a security issue. Large-scale bloodletting could easily spill over Iraq's borders as traumatized and vengeful refugees flee to countries like Iran, Syria and Saudi Arabia. Historically, such population movements have caused trouble for decades to come.

These interests are achievable with fewer forces. President Bush is fond of warning, "If we leave Iraq, they will follow us home." This makes no sense. Qaeda terrorists from Iraq could have made their way to America at any point in the last three years. In fact, Iraq's borders are more porous today than they have ever been. If a terrorist wanted to inflict harm on U.S. civilians, he could drive across Anbar into Syria, then hop a plane to New York or Washington, D.C. Does the president really believe that because we're in Iraq, terrorists have forgotten that we're also in America? Here's what we really need to worry about doing:

Battle Al Qaeda. In fact, the fight in places like Anbar is largely not a jihadist crusade against America, but a Sunni struggle for control of the country. The chances of Iraq's being taken over by a Qaeda-style group are nonexistent. Some 85 percent of the population (the Shia and Kurds) are violently opposed to such a group. And polls have consistently shown that the vast majority of Sunnis dislike Al Qaeda and Osama bin Laden. The real jihadists in Iraq are a small and unpopular band that relies on terror and violence to gain strength. They do not have heavy weapons—tanks, armored vehicles—and cannot hold territory for long. Were a deal between the Shia and the Sunni to be signed, Al Qaeda would be marginalized within months. In the meantime, U.S. Special Forces could harass and chase Qaeda terrorists just as they do in Afghanistan today.

Secure Kurdistan. The Iraqi Kurdish region is the one unambiguous success story of the Iraq war. It is stable and increasingly prosperous. Its politics are more closed and corrupt than most realize—the place is essentially carved up into two one-party states—but it has aspirations to become more market-oriented and more democratic. Perhaps most crucially, it is a Muslim region in the Arab world that wants to be part of the modern world, not blow it up. The simplest way for the United States to ensure the security of Kurdistan would be to give it a security guarantee.

There are various proposals to redeploy U.S. forces in the region. Beyond a token force, this seems unnecessary. The troops would be far from the problem areas of Iraq. And what would their mission be? To stop Kurdish secession? To get involved in battles between Kurdish separatists and the Turkish Army? Kurdistan can be defended quite easily with a political guarantee. And Kurdish leaders seem to recognize that, as with Taiwan, their de facto independence depends on their not demanding de jure independence.

Prevent a bloodbath. This is the most difficult task. The United States will not be able to stop all sectarian fighting in Iraq. It cannot do so even today. Our goal must be to ensure that any such violence remains localized and limited, and that national institutions like the Army and police work to stop it rather than participate. That will require some ability to control movement along Iraq's roads and highways. It will also require monitoring the Army and police. The strategy of pairing Iraqi Army units with U.S. advisers has worked well thus far. Iraqi forces don't fight superbly in the presence of Americans, but they fight much better and more professionally. Most important, they tend not to commit major human-rights abuses when we are around.

Draw down troops and ramp up advisers. To preserve these interests, the United States should begin drawing down its troop levels, starting in January 2007. In one year, we should shrink from the current 144,000 to a total of 60,000 soldiers, some 44,000 of them stationed in four superbases outside Baghdad, Balad, Mosul and Nasi-riya. This would provide a rapid-reaction force that could intervene to secure any of the core interests of the United States when they are threatened. To preserve the basic security of Iraq and prevent anarchy, U.S. troops must also act as the spine of the new Iraqi Army and police force. American advisers should massively expand their current roles in both organizations, going from the current level of 4,000 Americans to at least 16,000, embedding an American platoon (30 to 40 men) in virtually every Iraqi fighting battalion (600 men).

This plan might not work. And if it does not, the United States will confront the more painful question of what to do in the midst of even greater violence and chaos. The Brookings Institution's Kenneth Pollack is already working on a plan to address just such a worst-case scenario, in which U.S. forces establish "catchment basins" along the borders of Iraq to stop massive refugee flows. But there is also the possibility that Iraq's leaders will begin to face up to their challenges, move the country toward reconciliation and build up the capacities of their state. Civil strife tends not to go on forever. A new nation and a new state might well emerge in Iraq. But its birth will be a slow, gradual process, taking years. The most effective American strategy, at this point, is one that is sustainable for just such a long haul.

The Iraq war has had its achievements. A brutal dictator who tyrannized his people (killing about 500,000 of them), attacked his neighbors and for decades sought dangerous weapons is gone. One part of the country, Kurdistan, is indeed turning into a promising society. The many strains of Arab politics are negotiating for space in Iraq, through political parties and the press, in a way that one sees nowhere else in the region. But these achievements must now be consolidated, or they too will be at risk.

The lesson of Korea, where more than 30,000 U.S. troops are stationed to this day, is not that America should withdraw from Iraq completely. But to have any chance of lasting success, we must give up our illusions, scale back our ambitions, ensure that the worst does not happen. Then perhaps time will work for us for a change.