CSIS, 21 Feb 07: The British Defeat in the South and the Uncertain Bush Strategy in Iraq: Oil Spots, Ink Blots, White Space, or Pointlessness?
...In practice, any form of US action that ends in some form of “victory” means finding a strategy that allows the US to withdraw most US forces from an Iraq that is stable enough to have reduced internal violence to low levels that can be controlled by local forces, that is secure against its neighbors, that is politically and economically unified enough to function and develop as a state, and which is pluralistic enough to preserve the basic rights of all of its sectarian and ethnic factions.

Things in Iraq may have deteriorated to the point where none of the “least bad” options now available allow the US to achieve these goals. From a perceptual viewpoint, “victory” may already be impossible because most of the people in Iraq, the region, and Arab and Muslim worlds will probably view the US effort as a failure and as a partial defeat even if the US can leave Iraq as a relatively stable and secure state at some point in the future. The perceived cost of the US-led invasion and occupation has simply been too high in terms of local opinion...

...The British may not have been defeated in a purely military sense, but lost long ago in the political sense if "victory" means securing the southeast for some form of national unity. Soft ethnic cleansing has been going on in Basra for more than two years, and the south has been the scene of the less violent form of civil war for control of political and economic space that is as important as the more openly violent struggles in Anbar and Basra.

As a result, the coming British cuts in many ways reflect the political reality that the British "lost" the south more than a year ago. The Shi'ites will takeover, Iranian influence will probably expand, and more Sunnis, Christians, and other minorities will leave. British action will mean more pressure for federation and separatism, but local power struggles are more likely to be between Shi'ite factions than anything else....