CAIRO, December 24, 2004 – In a week that saw the deadliest single attack on Americans in Iraq - and the first major US contractor to pull out - more and more military experts are warning that drastic changes are needed to both US strategy and American public expectations if there's to be success there.

Tuesday's suicide bombing at a US mess tent in Mosul is only one of the most visible symbols of the deepening challenge. The "ground has fundamentally shifted" in recent months, according to a new report by the International Crisis Group (ICG). Based on field interviews with Iraqis, it says wide-spread disaffection with the US presence is threatening the emergence of stable democracy friendly to the US.

While US troop numbers are rising ahead of Iraqi elections, several analysts, some with close ties to the US defense establishment, say successes in Iraq so far have been minor when held up against an increasingly sophisticated insurgency.

The ICG and others don't expect the insurgents to fade away after Iraq's January 30 election. The best scenarios say it will take years to defeat them. But the game plan so far - including the November assault on Fallujah that killed over 1,000 alleged fighters - has failed to stop the bombings and attacks around the country.

Thursday, Iraqis began trickling back on into Fallujah. More than 200,000 people sought shelter in nearby villages ahead of the Nov. 8 attack. Iraq's interim government said families would be paid up to $10,000 if their homes were damaged in the assault. It warned those returning that the city is without power or water. Reuters reported Thursday that US forces shelled the south and northwest of the city, where they clashed with gunmen. Some returning refugees retreated upon hearing the explosions and seeing columns of smoke.

The US will have to consider fresh options for tackling the insurgency, say analysts.

"I'm sure the [Jan. 30] election will be trumpeted as a great success, but it may not mean much, if the insurgency continues and the government can't deliver on promises, just as the current government has failed,'' says Rob Malley, director of the ICG's Middle East program.

One key element that could get Iraq back on track would be the creation of a credible and effective domestic security force, something that the US has long promised but failed to deliver.

"The coalition's persistent inability to deliver a popular political message, its failures to use economic aid effectively, have continued to aid the insurgents,'' Anthony Cordesman, a security analyst at the Center for Strategic and International Studies and a former senior Defense Department official, wrote in a report this week on Iraq's insurgency.

"The lack of highly visible Iraqi forces... [has] also reinforced the image of a nation where fighting is done by foreigners, non-Muslims, and occupiers. The end result has been that many Coalition and Iraqi Interim Government tactical victories produce a costly political and military backlash. Even successful military engagements can lead to the creation of as many new insurgents as they do kill or capture," writes Cordesman.

MARINE Col. Thomas Hammes agrees that this is critical. "We keep saying that this is the most important thing, but how many Iraqi soldiers have you seen riding around in armored cars,'' asks Colonel Hammes, a professor at the National Defense University, in Washington, and author of the "Sling and the Stone.'' The book on counterinsurgency was recently selected by a panel of retired and serving officers as the most important book for US commanders in Iraq to read.

But Hammes says the most important change to be made now is in the way that American leaders talk to the people about what's going on in Iraq. He says history shows that most insurgencies, whether the Vietnamese against the French and later the US, or the Afghans against the Soviets, last from 10 to 30 years.

He says he sees no reason why Iraq is any different, but worries the American public was ill-prepared for this by the rosy Administration pronouncements for most of the war.

"This isn't pessimistic, but realistic,'' says Hammes. The type of insurgency the US is fighting "is about directly attacking the will of our decision makers, and in America that's the voters."

A joint ABC/Washington Post poll released Monday showed this strategy is apparently working. The poll found 56 percent of Americans now feel the war is not worth its costs, a record high and up from 49 percent in July.

Hammes points to the Mosul attack, while tragic, as more important in terms of what it does to American views of the war than it is in military terms, since insurgent successes are to be expected.

"That's not a military target; it's just another way to get the insurgent message out that this war is too long, too hard, too difficult to win,'' he says. "The single toughest thing is sustaining the will of the American people, the only way to do that is to lay out all the costs and get them to stay in and commit."

But to some analysts, the view from inside Iraq has grown so dim that they advocate a radical shift in approach and expectations of what success could mean.

Steps once potentially capable of turning the situation around "in all likelihood" would now fail, the ICG says in its new report. "If the [Bush] administration does not take the measure of what has changed ... it may well meet its desired end-date, but at the cost of a highly dangerous end-state." The US hopes Iraq will adopt a new constitution and elect a full legislature by the end of 2005.

"Part of the effort has to be to redefine what success means,'' says Malley at ICG. "The original notion that Iraq was going to be a model for the region, of open government, of a liberal, free-market economy, isn't an achievable goal anymore."

Malley and the ICG say the US should make every effort to withdraw troops to bases and get away from heavy-handed counterinsurgency because it appears to be counterproductive. Instead, Iraqi anger at the US has grown so high that the best thing America could do for the government that comes in after the January elections is to allow it to go its own way, Malley says.

"The US may have to allow the government coming in to distance itself from the party that could hurt the legitimacy the most, including to withdrawing troops if that is what they ask for,'' says Malley. "In the past this would have been viewed as a failure for US policy, but now perhaps it has to be seen as a necessary element of success because it would at least preserve, hopefully, a unified country and a government that's seen as legitimate by its people."

Malley says worries that that the January elections could exacerbate tensions between Shiites and Sunnis, and therefore "do more harm than good."

"It's about minimizing harm at this point, for both the Iraqis and US strategic interests,'' he says.