Residents pray over the victims killed in Thursday night's suicide bomb attack in Hilla, during a funeral in Najaf, 160 km (100 miles) south of Baghdad, yesterday. Two suicide bombers killed 45 people and wounded 150 when they blew themselves up at a crowded market in the Iraqi town of Hilla on Thursday, police said. - Reuters

BAGHDAD (Reuters):

United States intelligence experts painted a gloomy picture of Iraq, saying in a report seen yesterday that sectarian bloodshed had surpassed the threat from al Qaida and warning of the consequences of a rapid U.S. withdrawal.

The report came at the end of a week in which several hundred people were killed in violence, including 270 killed near the town of Najaf when U.S. and Iraqi forces battled what Iraqi officials say were members of a shadowy sect.

The National Intelligence Estimate report, parts of which were obtained by Reuters, described a serious situation, with Iraqi-on-Iraqi violence having surpassed al Qaida activities.

It concluded that elements of the conflict could be called a 'civil war'.

"The term 'civil war' does not adequately capture the complexity of the conflict in Iraq," said the report. "Nonetheless, the term "civil war" accurately describes key elements of the Iraqi conflict."

Civil war

The administration of U.S. President George W. Bush has steadfastly avoided using the term 'civil war', which could heighten already growing calls for an early withdrawal of American troops from Iraq.

Portions of the 90-page report seen by Reuters predicted the situation in Iraq would worsen unless efforts were made to reverse conditions.

Bush said in January he would send 21,500 additional U.S. troops to Iraq in an effort to get a grip on the sectarian killings and insurgent attacks, especially in Baghdad.

The troop boost — on top of the some 130,000 American troops already here — is widely seen as a final attempt to avert all-out sectarian civil war between Iraq's Shi'ite majority and Sunnis once dominant under Saddam Hussein.

The report said a rapid withdrawal of U.S. forces would lead to massive civilian casualties, the possible intervention by Iraq's neighbours, including a military incursion by Turkey, and that the Iraqi government would be unlikely to survive as a non-sectarian institution and that al Qaida would use parts of Iraq to plan attacks inside and outside the country.