Zalmay Khalilzad, the US envoy in Baghdad who tried to conciliate the Sunni people, is to leave his post in the next few months said a senior member of the US administration.
"Khalilzad really failed because greater Sunni political participation has not reduced the violence and has at the same time angered the Shia," said a senior Kurdish political figure.
Appointed ambassador to Iraq in April 2005 Mr Khalilzad played a highly active role in Iraqi politics but the crisis has worsened dramatically during his tenure.
The Afghan-born Mr Khalilzad was more effective than his predecessors in cultivating Iraqi political leaders. He sought to amend the Iraqi constitution before it was approved in a referendum in October so it would be more acceptable to the Sunni community that largely supports armed resistance to the US occupation. Mr Khalilzad also played a central role in getting rid of the prime minister Ibrahim al-Jaafari only to find that his successor Nouri al-Maliki was more resistant to US demands.
Mr Khalilzad was skilful in cultivating good personal relations with Iraqi politicians but often found they did not have the power to deliver what he wanted.
His critics say he did not appreciate that Iraq is very different from Afghanistan where he was US envoy.
While willing to open talks with some Sunni insurgent groups Mr Khalilzad found the most powerful ones wanted to expel the US, not negotiate.
Mr Khalilzad is likely to stay into the spring the US official said. His likely successor will be Ryan Crocker, a senior career diplomat who is currently US ambassador to Pakistan.
In Baghdad, the chief prosecutor said the Iraqi appeals court is expected to rule on the guilty verdict on Saddam Hussein by mid-January. If affirmed he could be hanged within 30 days.