IMPEACH BUSH

WASHINGTON - Lawmakers returning here this week got hit with more bad news about Iraq in a confidential report that says the fragile democracy is "collapsing," the Daily News has learned.

The boycott of the government by certain Shiite and Kurdish political blocs has left Iraq's leadership hanging by a thread, according to a report by the Congressional Research Service.

The report by CRS, Congress' research and analysis arm, was completed Aug. 15 for the House and Senate.

"My assessment is that because of the number and breadth of parties boycotting the cabinet, the Iraqi government is in essential collapse," Kenneth Katzman, the author of the report, said. "That argues against any real prospects for political reconciliation."

Without a political infrastructure in Iraq, any military progress would be short-lived, he added.

Katzman, who grew up in Long Island, also challenged the success of the Baghdad Security Plan, known as the troop "surge," which President Bush claims is working.

"I would even question the military progress," he said.

Many senior State Department officials in Iraq believe a political solution to the war is now "hopeless," according to a top diplomat.

"I would agree with that," Katzman said.

The CRS analysis said Iraqi Prime Minister Nouri al-Maliki is trying to save a "collapsing government" while fending off rivals who wish to topple him.

While U.S. troops have succeeded in temporarily pacifying Anbar Province west of Baghdad, violence has spiked north of the city in provinces such as Diyala, where Al Qaeda in Iraq relocated, he said.

The influential CRS report obtained by The News was completed before another pessimistic congressional report released yesterday. Both were waiting for lawmakers returning from their summer recess.

Congress' investigative agency, the General Accountability Office, reported that Iraq hasn't completed 11 of 18 U.S.-set benchmarks for progress.

jmeek@nydailynews.com