The International Crisis Group said the British Army has been unable to control the southern city of Basra amid infighting among Shi'ite militias. The Brussels-based organization, which often consults for the European Union, said Operation Sinbad has been similar to the U.S.-led effort to target Al Qaida and stabilize Baghdad.

"Far from being a model to replicate, Basra is an example of what to avoid," ICG said in a report. "With renewed violence and instability, Basra illustrates the pitfalls of a transitional process that has led to the collapse of the state apparatus.

Basra has been torn apart by a militia war over the oil industry in southern Iraq. Iran was said to have played a major role in supporting its proxies.

"The answer to Iraq's horrific violence cannot be an illusory military surge that aims to bolster the existing political structure and treats the dominant political parties as partners," the report said.

The report said the Mahdi Army, led by Moqtada Al Sadr, has exercised a major influence on Basra police. The Iraqi intelligence service has been dominated by the rival Supreme Iraqi Islamic Council. The Oil Protection Force was controlled by Fadhila, another Shi'ite militia.

"Basra teaches that as soon as the military surge ends and coalition forces diminish, competition between rival factions will surge," ICG said.