Iraq War Enters 4th Year With Bleak Future.

An Iraqi, Ali Zeidan said, "Since U.S.-led troops came into Iraq, we get nothing," "Three years have passed by for the Iraqi people and they are still suffering psychologically ... and economically."

"This is really about a war plan that went wrong based on a series of bad decisions that reflected really abysmal intelligence," said Loren Thompson, head of the Lexington Institute, a military think tank outside Washington.

Jon Alterman, who worked on Iraq policy at the State Department before the war and is now an analyst with the Center for Strategic and International Studies in Washington, said his many American and Iraqi contacts in the embattled country are at more and more of a loss. "Everybody I know who works in Iraq and the Iraqis themselves say it's becoming increasingly difficult to figure out what's going on," he said.

On the political front, Iraqi leaders still had not formed a government more than three months after elections for the country's first permanent post-invasion parliament, but they did announce an agreement on establishing a Security Council to deal with key matters while negotiations proceed.

However, Adnan al-Dulaimi, a Sunni Arab political leader said, “It was a successful meeting, and we have agreed on forming a National Security Council whose powers will not contradict the constitution." The council, to be headed by President Jalal Talabani, was established as an interim measure as politicians struggle to agree on the makeup of a new government following the Dec. 15 parliamentary elections.

Al-Dulaimi said nine council seats would go to Iraq's Shiite Muslim majority, while Kurds and Sunni Arabs each would control four seats and the secular bloc two. Talabani, a Kurd, would head the group.

The exact powers of the council, if any, were not explained. But it appeared to have been formed to ensure that politicians from minority blocs would at least be consulted in advance on important government and security decisions.

The political discussions on forming a government began last week under pressure from U.S.

President Bush offered an upbeat assessment. "We are implementing a strategy that will lead to victory in Iraq. And a victory in Iraq will make this country more secure and will help lay the foundation of peace for generations to come," he said.

U.S. and Iraqi soldiers on Sunday sought to root out insurgents from farming villages an hour's drive north of the capital. They have captured dozens of suspects in the air-assault operation.

The 133,000 American troops on the ground inside Iraq was nearly a third more than took part in the campaign to oust Saddam Hussein that began in the early hours of March 20, 2003. At least 2,314 U.S. military personnel have died in the war, which is estimated to have cost $200 billion to $250 billion so far. Bush says about 30,000 Iraqis have been killed, while others put the toll far higher.