The United States has been quietly mulling the prospect that Iraq would break up into autonomous regions.

The Council on Foreign Relations, which usually reflects State Department thinking, has recommended the restructuring of Iraq into six states under a single national government. The council, in a report entitled "Power-Sharing in Iraq," warned that even with elections an Iraq led by a strong central government might not be democratic.

Officials said the Bush administration has been discussing options for Iraq following the withdrawal of U.S. troops in 2007, Middle East Newsline reported. They said without a strong military presence the central government in Baghdad could lose or cede control to ethnic regions.

"It is about the distribution of political power through institutions and laws that guarantee accountable rule," author David Phillips wrote. "In the new Iraq, federal Iraqi states should control all affairs not explicitly assigned to the federal government."

Phillips, a former adviser to the U.S. government, proposed the establishment of two or three states dominated by Shi'ites. Another state would be comprised of mostly Sunnis and a third state would be Kurdish. Baghdad would be a separate state.

"Consistent with the principle of decentralisation, federal Iraqi state and local authorities should have the ability to adopt laws that conform to local custom," the report said.

So far, the Bush administration has been increasingly unhappy over the failure by the new government of Prime Minister Ibrahim Jaafari to impose control. Suicide car bombings have been at an all-time high and the government remains divided along both political and ethnic lines.

"The perception of governance is important," Gen. George Casey, the commander of the U.S.-led coalition in Iraq, said.

Officials cited the increasing tension among Kurds, Sunnis and Shi'ites amid efforts to establish a government. They said the Kurds have been the most advanced in efforts to set up an independent region or state. In January 2005, Kurdish authorities held a referendum on whether to establish an independent state in northern Iraq. About 95 percent supported this demand. "Kurdish leaders possibly at odds with mainstream Kurdish opinion have said that, for now, they will not push for independence," the Congressional Research Service said in a March 2005 report. "This stance is likely to ease the concerns of Turkey, as well as Syria and Iran, which have substantial Kurdish populations."

Already, Kurdistan has been seen as the most stable area of Iraq and has been attracting foreign business meant for Baghdad. The Iraqi-American Chamber of Commerce and Industry plans plans to hold a conference in October in Kurdistan for 240 firms that seek to invest in the Kurdish areas. The autonomous Kurdish government has signed 70 contracts with foreign companies and executed 25 projects worth $75 million.

At the same time, Shi'ite politicians have been excluding Sunnis from the Jaafari government. Shi'ites have also been pressing Jaafari for a purge of the civil service to remove those aligned with the former Saddam regime.

The effort has been in reaction to efforts by Sunni groups to target Shi'ite communities in Iraq in an attempt to foment a civil war based on ethnic lines. Officials said an increasing number of Shi'ites are mulling the prospect of an autonomous Shi'ite region in central and southern Iraq.

"In the best case, Iraq would become a federation with strong autonomous regional governments and a central authority in Baghdad responsible for external defense," an official said. "In the worst-case scenario, Iraq would break up into rival ethnic regions, each aligned with an outside power."

Each of the major ethnic groups have a large militia infrastructure. The Kurds have the largest militia force, with 50,000 trained fighters.

Officials said the Kurds are followed by the Shi'ites, with more than 20,000 fighters, and then the Sunnis, who can count on elements of the former Saddam Hussein regime.

"It's a subject that is not a priority for the coalition because of the Sunni insurgency," an official said. "But it is clear that once U.S. troops leave Iraq, the presence of ethnic militias will become pronounced."

The council plans to translate the report into Arabic and distribute it to the Iraqi government and parliament. The report cited challenges such as the sharing of Iraq's huge oil reserves, which are mostly along the southern border with Iraq and the northern border with Turkey. The central region has no known oil reserves.

The report recommends that Baghdad should retain a portion of oil revenues for operations. The balance should be distributed to the federal states on the basis of population.

Phillips said a federated Iraq could work only if each group cedes power or plans.

"For this to happen, hard choices must be made: Arab Shi'ites will have to forego demands for Islamic law as the only basis for legislation; Arab Sunnis must accept that they no longer control Iraq's institutions," the report said. "Iraqi Kurds must forego their dream of independence and sole control of oil in Kirkuk; and Iraqi Turkmen and Chaldo-Assyrians must recognize that they reside in federal Iraqi states where Arabs and Kurds constitute the majority."

Officials said the State Department was aware of the report but would not endorse a decision meant to be taken by Iraqis. Still, they said the question of Iraq's future and structure would be the key issues in the drafting of a constitution, given an Aug. 15 deadline. So far, work on the constitution has not even begun.

"If a draft is not ready by June 30, 2005, the Iraqi government should convene the assembly and consider a delay of up to six months," Phillips said.

The prospect of a united Iraq appears to be linked to how long the United States would be prepared to keep its forces in the Arab country. Many analysts agree that a withdrawal in 2006 would plunge the country into chaos. They cite a National Intelligence Council report that Iraq could be dominated by terrorist groups the way Afghanistan was until the U.S. invasion in 2001.

"Only an Iraqi government that possesses a relative monopoly on the means of violence can prevent this outcome," Lawrence Kaplan, a senior fellow at the Hudson Institute, said. "Alas, Iraq's security forces are nowhere near their goal of fielding sufficient numbers of police, national guard, and soldiers. In the meantime, then, either the U.S. military will fill the gap or no one will.

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