A major report on Iraq has backed withdrawing most US combat troops by 2008 as part of urgent action to tackle the "grave and deteriorating" situation.
The bipartisan Iraq Study Group issued a blunt assessment of American policy failings as Tony Blair prepared for talks with President George Bush in Washington.
It called for a new diplomatic drive to stabilise the country, telling the Bush administration it must "engage constructively" with Iran and Syria, and warning that the US's global standing would be diminished if it did not act.
America should also reduce political, military or economic support if the government in Baghdad does not make substantial progress in providing for its own security, the 10-member group said.
British politicians of all sides welcomed the report from the high-level panel, chaired by former Secretary of State James Baker - seen as a close ally of Mr Bush.
Foreign Secretary Margaret Beckett described the document as a "substantial and complex piece of work" and pointed out that the Prime Minister and senior British officials had given evidence.
Shadow foreign secretary William Hague, currently on a visit to Pakistan, said: "It seems to make many sensible recommendations, many of which stress points which David Cameron and I raised after visiting Iraq last week - in particular the creation of an international group and the emphasis laid on a negotiated settlement within Iraq.
He called on the Government to make a statement to Parliament concerning its plans before Christmas.
Liberal Democrat leader Sir Menzies Campbell said he believed there would now be a "retreat" from Iraq.
"This is the beginning of the end of the Iraqi adventure, which has been Britain's biggest foreign policy mistake since Suez. (This) report heralds the retreat from Iraq. The damage to Britain's interests has been incalculable."
