"As the situation in Iraq grows ever more tenuous, the Bush administration continues to spin the ominous news with matter-of-fact optimism. According to Secretary of Defense Donald Rumsfeld, Iraqi uprisings in half a dozen cities, accompanied by the deaths of more than 100 soldiers in the month of April alone, is something to be viewed in the context of "good days and bad days," merely "a moment in Iraq's path towards a free and democratic system." More recently, the president himself asserted, "Our coalition is standing with responsible Iraqi leaders as they establish growing authority in their country." But according to a closely held Coalition Provisional Authority (CPA) memo written in early March, the reality isn't so rosy. Iraq's chances of seeing democracy succeed, according to the memo's author—a U.S. government official detailed to the CPA, who wrote this summation of observations he'd made in the field for a senior CPA director—have been severely imperiled by a year's worth of serious errors on the part of the Pentagon and the CPA, the U.S.-led multinational agency administering Iraq. Far from facilitating democracy and security, the memo's author fears, U.S. efforts have created an environment rife with corruption and sectarianism likely to result in civil war. Provided to this reporter by a Western intelligence official, the memo was partially redacted to protect the writer's identity and to "avoid inflaming an already volatile situation" by revealing the names of certain Iraqi figures. A wide-ranging and often acerbic critique of the CPA, covering topics ranging from policy, personalities, and press operations to on-the-ground realities such as electricity, the document is not only notable for its candidly troubled assessment of Iraq's future. It is also significant, according to the intelligence official, because its author has been a steadfast advocate of "transforming" the Middle East, beginning with "regime change" in Iraq.

"And then there is the problem of Iran. According to the memo, "Iranian money is pouring in" to occupied Iraq— particularly the area under British control— and it asserts it is "a mistake" to stick to a policy of "not rock[ing] the boat" with the Iranians, as "the Iranian actors with which the State Department likes to do business . . . lack the power to deliver on promises" to exercise restraint in Iraq. According to senior U.S.intelligence and military officials queried on this point, the Iranian influence in Iraq is both real and formidable, and the US is, as one put it, at best "catching up" in the battle for influence. But the officials also added that pushing the point with Iran too hard - either through diplomatic channels or on the ground in Iraq - would likely be more troubled than the current course of action, possibly resulting in armed conflict with Iran or a proxy war in Iraq that the U.S. isn't ready to fight.