President Bush in Washington. (Reuters)

Washington, Dec. 6 (Reuters): The US should begin to withdraw forces from combat and launch a diplomatic push, including Iran and Syria, to prevent “a slide toward chaos” in Iraq, an elite panel recommended today.

The Iraq Study Group also urged Washington to reduce its political, military or economic support if Iraq’s government fails to advance security and reconciliation in the country, where, after almost four years of war, sectarian violence kills scores of people every day.

The influential, bipartisan group offered a pessimistic assessment of circumstances in Iraq and painted a nightmare scenario of rampant violence and spreading unrest across the region if the US fails to stabilise the country.

Among its unanimous recommendations, the group called for the White House to overcome its resistance to dealing directly with Iran and Syria, whom US officials accuse of fomenting the Iraqi insurgency, and to press for a “comprehensive Arab-Israeli peace” to settle that festering conflict.

President George W. Bush said he would take the much-anticipated report “very seriously” after he met the group but the White House has made clear he will not be bound by its ideas and has begun its own review of Iraq policy.

“The situation in Iraq is grave and deteriorating,” the five Republicans and five Democrats in the group said of the war, in which more than 2,900 US troops have died.“There is no magic formula to solve the problems.”

The group called for the diplomatic push to begin by the end of the year and recommended the US military strengthen its effort to train Iraqi forces by increasing the number of US forces engaged in such work to 20,000 from about 4,000.

“The primary mission of US forces in Iraq should evolve to one of supporting the Iraqi army, which would take over primary responsibility for combat operations,” it added.

While it set no hard timetable for the transition, the report said that by the first quarter of 2008 US combat troops not needed for “force protection” could be out of Iraq, depending on security conditions in the country.

More than three-and-a-half years after the March 2003 invasion that toppled Saddam Hussein, about 140,000 American troops remain in Iraq fighting an insurgency.

Democrat Lee Hamilton, who co-chaired the group with former secretary of state James Baker, suggested events are slipping away from the US.

In Baghdad today, fierce clashes erupted between Shia militias and residents of a Sunni neighbourhood after a mortar barrage.