"DIA judges the continued coalition presence as the primary counter to a breakdown in central authority, which would have grave consequences for the people of Iraq, stability in the region, and U.S. strategic interests," DIA director Michael Maples told the Senate Armed Services Committee on Nov. 15.

In an assessment that disputed the U.S. military, DIA, the intelligence arm of the Defense Department, warned of a collapse of the government of Iraqi Prime Minister Nouri Al Maliki.

DIA reported the takeover of Iraq's police and security forces by Iranian-sponsored Shi'ite militias amid the failure of U.S.-Iraqi operations to quell the insurgency.

"Today, DIA assesses the conditions for the further deterioration of security and instability exists within this ongoing, violent struggle for power," Maples said. "Although a significant breakdown of central authority has not occurred, Iraq has moved closer to this possibility primarily because of weak governance, increasing security challenges, and no agreement on a national compact."

Maples said attacks in Iraq rose sharply in 2006. He reported 180 attacks per day in October 2006, up from 70 in January. He said the daily average of attacks against Iraqi security forces in October more than doubled that in January, about 30 compared to 13. Attacks on civilians have increased four-fold since the beginning of 2006.

"The perception of unchecked violence is creating an atmosphere of fear and hardening sectarianism which is empowering militias and vigilante groups, hastening middle-class exodus, and shaking confidence in government and security forces," Maples said. "Sectarian violence, a weak central government, problems in basic services, and high unemployment are causing more Iraqis to turn to sectarian groups, militias, and insurgents for basic needs, imperiling Iraqi unity."

"In Baghdad, there was a 22 percentage drop in casualties related to sectarian violence and executions," U.S. military spokesman Maj. Gen. William Caldwell said.

But Maples stressed that the Sunni insurgency in Iraq, and particularly Al Qaida, has gained strength. He said the Al Qaida network, headed by Abu Ayoub Al Masri, has become the most active of Iraqi-based insurgency groups and regarded as a bulwark against Shi'ite domination.

"AQI [Al Qaida in Iraq] also poses a threat outside Iraq, as it is the only terrorist group in the country with known aspirations for external attacks, including possibly against targets in Europe and the U.S. homeland," Maples said. "Because of his involvement with Al Qaida-linked terrorists since the early 1980s, Abu Ayoub may have increased ties to Al Qaida senior leaders. These could enhance AQI's external attack capabilities."

The heart of the sectarian war has been Baghdad. The DIA assessed that Iraqi-U.S. military operations have failed to quell violence as Sunni groups learned to adapt to coalition operations.

DIA said the Iraqi Interior Ministry and police have been heavily infiltrated by Iranian-backed Sh'ite insurgency groups. The assessment said the Mahdi Army has been operating under police protection to detain, torture, and kill suspected Sunni insurgents and innocent Sunni civilians.

"Although leaders across the political spectrum who are participating in the government continue to talk and search for a positive way forward, the challenges to bringing stability and security with a cohesive, unified, and effective government remain significant," Maples said.

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