IYAD ALLAWI, Iraq's former Prime Minister, chose the third anniversary of the invasion yesterday to say that he believed that civil war had begun.

John Reid, the Defence Secretary, spent the day in Iraq insisting that it had not, and that Iraqis were bravely resisting terrorist efforts to provoke them into a destructive sectarian conflict.

Mr Reid, who shuttled around southern Iraq in a helicopter, visiting British troops, appeared surprised that Mr Allawi had issued the warning a day after the two had met in Baghdad to discuss the political situation.

Three months after December's election, a new government has not been formed, despite alarming levels of sectarian violence. The violence has thrown a long shadow over the anniversary, with Iraqis complaining bitterly of a terrible security situation, a continuing political vacuum, dire power and fuel shortages, economic problems and a growing fear of civil war.

Mr Allawi told the BBC that civil war had already started and that violence could spread to Europe and the US. He said: "We are losing each day an average 50 to 60 people throughout the country, if not more. If this is not civil war, then God knows what civil war is." As he made his comments yesterday, 12 Iraqis were killed in insurgent attacks and a US raid north of Baghdad. Four bodies turned up in a sewage plant and Shia pilgrims were attacked with a mortar.

The former prime minister said that political factions were "edging towards" a deal to secure the national unity government that Iraqis hope can save them from sectarian war. But Mr Allawi said that even forming a government would not represent "an immediate solution".

"Iraq is in the middle of a crisis," he said. "Maybe we have not reached the point of no return yet, but we are moving towards this point. We are in a terrible civil conflict now. It will not only fall apart, but sectarianism will spread throughout the region — and even Europe and the United States would not be spared all the violence that may occur as a result."

Mr Allawi also said that ethnic cleansing was occurring in some parts of Iraq. "We should not deny this," he told NBC News.

Other Iraqi political leaders were quick to disagree. Jalal Talabani, the President, said: "One can completely rule out the threat of civil war." Mahmoud Othman, of the Kurdish Alliance, said: "The situation in Iraq is bad. But the term ‘civil war' is too big."

Mr Allawi's appraisal contrasted with the view of Mr Reid, who attacked the British media for despairing over Iraq. After meeting Iraq's President, Prime Minister and Shia leaders, he insisted that progress was being made. "The miracle is that the Iraqi people have not turned on each other in civil war but have rather extended the hand of friendship to each other in the national government," he said.

Mr Reid offered no clues as to how Iraq's politicians could settle their differences, and would not say when he thought a new government may be formed. Iraqi politicians have speculated that it may take months. Mr Reid insisted that turning Iraq into a successful democracy would help to defeat al-Qaeda terrorism.

Mr Reid spent his three-day visit with British soldiers and Iraqi politicians, but said that he had met ordinary Iraqis. "They work in our embassy and our bases and I've talked to them. They weren't talking about civil war."

In Iraq's safest province, the situation is so bad that British soldiers rarely remove their body armour outside bases. Mr Reid said that real progress was being made in quieter provinces such asAl Muthana.

Few British troops expressed an opinion on their mission. Darren Knight, from the First Fusiliers, was in the invasion force three years ago. He said: "If it was up to me I'd go home. Nobody likes being here, but it's a job we have to do I suppose."

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