Leading article: A moment of clarity amid the bloodshed and carnage

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The state of Iraq is perilously close to collapse. As we report today, 1.6 million people have been forced to flee the country since the invasion in 2003 and a further 1.5 million have been displaced internally. This is one of the largest population movements in the Middle East since the formation of the state of Israel. The once great metropolis of Baghdad is now effectively a dozen small cities, each patrolled by its own sectarian militia. Only the Kurdish regions in the north of the country are unscathed. And even the future of that enclave of relative stability is in doubt as Iraq hurtles, apparently inexorably, towards final break-up.

There is no way of knowing for sure how many have been killed since the invasion, but it is clear that hundreds of thousands of Iraqis have died at the hands of coalition troops, sectarian death squads and insurgent bombers. Many Iraqis now say life is even more intolerable than it was under the iron fist of Saddam Hussein.

All this bloodshed seems to have provoked a moment of clarity in Washington. President Bush spoke at the weekend of his readiness to "change tactics" in Iraq. And a diplomat at the State Department gave an interview in which he claimed the US has acted with "arrogance" and "stupidity" in Iraq. More hints have emerged that the Congress-commissioned Iraq Study Group, led by the former Secretary of State James Baker, is preparing to outline an exit strategy. Meanwhile, here in Britain, the Foreign Office Minister, Kim Howells, expressed the hope over the weekend that our own troops will be withdrawn within a year.

But dig a little deeper and it is clear that delusion and dishonesty still hold sway in the minds of our leaders. Tony Blair was still arguing last week that a withdrawal of troops would lead to a disaster in Iraq. And President Bush continues to stress that "our goal is victory". These two architects of the 2003 invasion are still unable - or unwilling - to accept the comprehensive failure of their policy in Iraq.

To any objective observer it is clear that Iraq is in a state of disaster already. And it also evident that our troops are failing to stop the sectarian killing. The US government's push to establish security in Baghdad this month only succeeded in boosting the death toll further. And even the head of the British Army, Sir Richard Dannatt, believes that our presence, far from keeping a lid on the fighting, is making the security situation worse.

We are constantly told that troop withdrawals will begin when Iraq's security forces prove able to take on more responsibility themselves. Yet this promise has no credibility. For one thing, there is no reason to believe that the Iraqi security forces will be able to impose order where British and American troops have so comprehensively failed. For another, Iraqi forces are simply not trusted by the population. Given that many sectarian death squads wear police and army uniforms, this is hardly unsurprising.

Yet Mr Blair and Mr Bush - in public at least - continue to argue that progress is being made and that ultimate success in Iraq is attainable if we will only summon up the will to complete the job. The truth is that can be no "victory" for President Bush or our Prime Minister. The hubris of these two men has broken a nation and placed the armies of Britain and America in the midst of an undeclared civil war. Their political legacies have been written in blood. All that remains now is the question of how our forces can be extracted from this carnage without making a catastrophic situation even worse.

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