A bi-partisan commission studying the war in Iraq says President Bush's policy is not working and major changes are needed in America's military and diplomatic strategy. A much anticipated report released Wednesday by the Iraq Study Group says most U.S. combat troops could be withdrawn by early 2008. VOA Correspondent Meredith Buel has details from Washington.

Iraq Study Group co-Chairs James Baker (r) and Lee Hamilton answer questions at news conference in Washington, 06 Dec 2006

The co-chairman of the Iraq Study Group, Lee Hamilton, says the Bush administration's approach to the war in Iraq has not been successful and the ability of the United States to influence events there is diminishing.

"The situation in Iraq is grave and deteriorating. Violence is increasing in scope and lethality. Attacks on U.S. forces and U.S. casualties continue at an alarming rate. The Iraqi people are suffering great hardship," said Hamilton.

The study group report recommends a change in the primary mission of U.S. troops from combat to a role supporting Iraqi security forces.

Hamilton says this will enable the United States to begin to move its combat troops out of the country soon.

"By the first quarter of 2008, subject of course to unexpected developments on the ground, all U.S. combat brigades, not necessary for force protection, could be out of Iraq," he added.

The panel also called for increasing the number of U.S. soldiers embedded with Iraqi forces, from 4,000 to as many as 20,000.

The group's other co-chairman, former Secretary of State James Baker, says major diplomatic changes are necessary to improve the situation in Iraq.

"The United States should promptly initiate a new diplomatic offensive, and working with the government of Iraq, should create an international Iraq support group to address comprehensively the political, economic and military matters necessary to provide stability in Iraq," he said. "That support group should include Iraq of course, but also all of Iraq's neighbors, including Iran and Syria."

The Bush administration has refused to engage in direct discussions with Iran and Syria, saying both are supporting insurgents in Iraq and are involved with international terrorist groups.

The panel also says the United States can not achieve its goals in the Middle East unless it deals directly with the Arab-Israeli conflict and regional stability.

The group calls for the Bush administration to launch a renewed and sustained diplomatic effort to find a solution to that conflict.

The report also takes aim at the Iraqi government, saying it is not adequately advancing the key issues of national reconciliation, providing basic security, or delivering essential services.

Co-chairman Lee Hamilton says the Iraqi government must reach specific benchmarks in these areas, or risk losing assistance from the United States.

"If the Iraqi government does not make substantial progress toward the achievement of milestones, the United States then should reduce its political, military or economic support for the Iraqi government," he said.

The panel delivered its report to President Bush, who says the group gave a very tough assessment of the situation in Iraq.

Mr. Bush says the report contains interesting proposals and promised to act in a timely fashion.