The chairman of the U.S. Joint Chiefs of Staff - General Peter Pace - says an increased American military presence in Baghdad will help Iraqi authorities deal with escalating violence.

General Pace and Defense Secretary Donald Rumsfeld discussed security in Iraq at the Pentagon Wednesday, following word that the United States is transferring several thousand troops from elsewhere in Iraq to the capital.

Rumsfeld says Iraq is facing a high level of sectarian violence, but is not yet in a state of civil war.

However, Britain's outgoing ambassador to Baghdad, William Patey, reportedly is warning that Iraq is likely break up along ethnic lines.

Patey says the situation in Iraq "is not hopeless," but there is a risk that Shi'ite militias could become "a state within a state, as Hezbollah has done in Lebanon."

The British envoy's comments, in a confidential memo sent to London as he completed his term in Baghdad, were first reported by the BBC.

Meanwhile, Iraq's President Jalal Talabani predicts Iraqi forces will take over security for all of the country by the end of this year.

Currently, U.S. and British forces are responsible for security in most of Iraq.