The Baker report on an exit strategy from Iraq, leaked this week in the US, is as sensible as it is sensational. It rejects "staying the course" as no longer plausible and purports to seek alternatives to just "cutting and running". Stripped of political sweetening, it concludes that there is none. America must leave Iraq without preconditions and hope that its neighbours, hated Syria and Iran, can clear up the mess. This advice comes not from some anti-war coalition but from the Iraq study group under the former Republican secretary of state, James Baker, set up by Congress with President George Bush's endorsement. Students of Iraq studies should at this point sit down and steady their nerves. Kissinger is in Paris. The Vietnam moment is at hand.

Earlier this week Bush telephoned the Iraqi prime minister, Nuri al-Maliki, to reassure him about rumours swirling through Washington that the Pentagon was about to topple him for being useless. It was reported that Maliki had just two months to get both his army and the escalating violence - running at some 100 deaths a day - under control. Washington was allegedly searching for a new "strong man" to pull the militias into line and assert the power of central government over Iraq's catatonic insecurity.

Lending force to these rumours, Republican Senator John Warner has spoken of a deadline for withdrawal and some version of a "three-state" solution. The Kurds are already autonomous. Let the same apply to the Sunnis and Shia. In the west of the country a Sunni body, the Mujahedin Shura, has come out for a six province western region under Prince Abu Omar Baghdadi. In the south the Iranians are watching as the British cede control and a possible eight-province "confederacy" slides effortlessly under their de facto aegis. Every US thinktank is now busying itself (at last) with alternative futures for Iraq.

Since accurate reporting is near impossible, the scale of that country's collapse under three years of US and UK occupation is hard to measure. Civil war is normally indicated by death rates and population movements. Whether the figure of civilian deaths is 50,000 or ten times that number is immaterial; either is a horrific comment on the impotence of the occupation. The UNHCR estimates 365,000 internal refuges in Iraq this year alone. More are seeking asylum abroad than from any other nation.

A third of Iraq's professional class is reported to have fled to Jordan, a flight of skills worse than under Saddam. UN monitors now report 2,000 people a day are crossing the Syrian border. Over a hundred lecturers at Baghdad university alone have been murdered, mostly for teaching women. There are few places in Iraq where women can go about unattended or unveiled. Gunmen arrived earlier this month at a Baghdad television station and massacred a dozen of the staff, an incident barely thought worth reporting. The national museum is walled up. Electricity supply is down to four hours a day. No police uniform can be trusted. The arrival anywhere of an army unit can be prelude to a mass killing and makes a mockery of the American policy of "security transfer". All intelligence out of Iraq suggests this is no longer a functioning state.

For all the abuse which Europeans regularly heap on the American political process, it has one strength, its capacity for course-correction. A constitution heavy with checks and balances enables it to respond to new circumstances with brutal pluralism. Three years ago America went to war on a lie, a wing and a prayer. That war has clearly failed and consensus is disintegrating. Congress subjects serving and retired generals to searing cross-examination. Senior figures go to Baghdad and, when they break free of their minders, report independently. There is none of the executive deference of Britain's parliamentary committees and tongue-tied "loyal opposition". America's debate on Iraq is now a grim, grinding encounter with reality.

The debate must contemplate the painful but not unfamiliar experience of imperial retreat. As in Vietnam, Lebanon and Somalia the moment is delayed but the deed will be efficient. The Baker commission, appearing in full after November's congressional election, realises the senselessness of the present bloodbath. It reportedly accepts that the continued presence of foreign forces does not prevent but adds to the chaos. American troops are in occupation but not in control. Their departure can hardly undermine security, except possibly that of Baghdad's green zone, and that is largely privatised.

A measure of the collapse is the astonishing suggestion that America find a new regime in consultation with Iran and Syria. This can only mean accepting some degree of confederacy, looking to the shadowy militias, warlords and sheikhs for provincial and regional leadership. Last year's Iraq constitution negotiated by the American ambassador in Baghdad, Zelmay Khalilzad, remains the best template for this. It is significant that Maliki, in a recent interview with US Today, referred to the possibility of giving Sunnis and Shia muslims some of the autonomy enjoyed by the Kurds. Given the sheer scale of civil violence rife in and around Baghdad the price of such autonomy may be population migration, but that is happening on a massive scale already: Iraq is partitioning itself. It might at least presage a sort of political reconstruction, without which peace and prosperity are inconceivable.

What is humiliating for Britons is that not a whisper of such lateral thinking can be heard from the government. Downing Street is intellectually numb, like a forgotten outpost of a crumbling Roman empire. It can see the barbarians at the gates yet it dare not respond as it knows it should because no new instructions have arrived from Rome. As for parliament, the opposition, academics, thinktanks and most of the media, a zombie-like inertia is all. Last week's row over controversial remarks by the army chief, Sir Richard Dannatt, was concerned not with what he said but whether he should have said it. Every one is waiting for the US to move.

Blair's last comment on Iraq was that any withdrawal would be "craven surrender" and would endanger British security. This is mad. Even Bush can admit to be "open to new ideas on Iraq". Blair has clearly not heard of Baker's report. Perhaps he should hurry to Washington for new instructions from the boss.

simon.jenkins@guardian.co.uk

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