The report says: "Fourteen more will be completed by the contractor, and the remaining facilities, which are partially constructed, will have to be completed by other means." The inspectors blame the failure in this instance on management problems and security concerns.

The danger facing foreigners in Iraq was highlighted yesterday when a roadside bomb 30 miles south of Baghdad killed three private security firm staff and wounded two others. One of the wounded is British, the Foreign Office said.

The detailed and lengthy report on work projects in Iraq has been drawn up by Stuart Bowen, the special inspector general for Iraq reconstruction (Sigir). Mr Bowen's office was set up after Congress expressed concern about the slow rate of reconstruction and the misuse of funds on a massive scale.

The report says Mr Bowen's inspection team is investigating 72 cases of alleged fraud and corruption, and is pursuing leads not only in the US but in Europe and the Middle East.

In March, investigators conducted a successful sting operation which led to the arrest of a contractor who offered a bribe to one of its undercover agents.

The report says many completed projects "have delivered positive results, but there exists a gap between US project outputs and the delivery of essential services to Iraqis".

While progress has been made in the construction of schools and police stations, many Iraqis still have no access to clean water, and electricity supplies in Baghdad are still below pre-invasion levels. The inspectors say that economic recovery is being hampered by the failure to restore Iraq's oil production to levels before 2003.

The report says that corruption in the oil and gas sector is a continuing problem that could have "devastating effects" on reconstruction in Iraq.

The inspectors audited Task Force Shield, a project established in September 2003 to build Iraq's capacity to protect its oil, gas and electrical infrastructure, and found significant shortcomings. The report concludes the project "failed to meet its goals because it was burdened by a lack of clear management structure and poor accountability. There were also indications of potential fraud, which are now under review by Sigir investigators."

Up to last month, Washington had invested more than $265m to improve the protection of energy infrastructure in Iraq.

Task Force Shield sought to cover 340 key installations, 4,000 miles of oil pipeline, and 8,000 miles of electrical transmission lines.

In a separate section, the report notes that a former contractor and former senior staffer in the now defunct US-led coalition government are facing jail sentences 30 to 40 years on corruption charges.The contractor will have to pay $3.6m in restitution and forfeit $3.6m in assets.

Apart from mismanagement and corruption, the report identifies continuing attacks by Iraqi insurgents as one of the main reasons for the delays and failures. It says: "Insurgent activity continues to impede ongoing reconstruction projects and interrupt their transition to Iraqi control.

"But the attacks remain concentrated in a few areas, leaving daily life in much of the rest of Iraq - particularly the Kurdish north and some areas of the south - in a state of gradual recovery."

The report adds: "Corruption is another form of insurgency. This second insurgency can be defeated only through the development of democratic values and systems, especially the evolution of effective anti-corruption institutions."

Iraq's president, Jalal Talabani, said yesterday that he and US officials had met with insurgents and that a deal with some groups to end violence could be reached.

In a statement, Mr Talabani said: "I believe that a deal could be reached with seven armed groups that visited me."

He said he advised Bush before the U.S.-led invasion in March 2003 to send more troops to Iraq, but that the administration did not follow his recommendation.

Rice, Bush's national security adviser during the run-up to the war, neither confirmed nor denied Powell's assertion. But she spent a good part of her appearances on three Sunday talk shows reaching into the past to defend the White House, which is trying to highlight the positive to a public increasingly skeptical in this election year of the president's conduct of the war and concerned about the large U.S. military presence.

"I don't remember specifically what Secretary Powell may be referring to, but I'm quite certain that there were lots of discussions about how best to fulfill the mission that we went into Iraq," Rice said.

"And I have no doubt that all of this was taken into consideration. But that when it came down to it, the president listens to his military advisers who were to execute the plan," she told CNN's "Late Edition."

Powell, in an interview broadcast Sunday in London, said he gave the advice to now retired Gen. Tommy Franks, who developed and executed the Iraq invasion plan, and Defense Secretary Donald H. Rumsfeld while the president was present.

"I made the case to General Franks and Secretary Rumsfeld before the president that I was not sure we had enough troops," Powell said in an interview on Britain's ITV television. "The case was made, it was listened to, it was considered. ... A judgment was made by those responsible that the troop strength was adequate."

Rice said Bush "listened to the advice of his advisers and ultimately, he listened to the advice of his commanders, the people who actually had to execute the war plan. And he listened to them several times," she told ABC's "This Week."

"When the war plan was put together, it was put together, also, with consideration of what would happen after Saddam Hussein was actually overthrown," Rice said.

In January, Pentagon officials acknowledged that Paul Bremer, the senior U.S. official in Iraq during the first year of the war, told Rumsfeld in May 2004 that a far larger number of U.S. troops were needed to effectively fight the insurgency, but his advice was rejected.

Bremer said his memo to Rumsfeld suggested half a million troops were needed - more than three times the number there at the time.

"There will be time to go back and look at those days of the war and, after the war, to examine what went right and what went wrong," Rice said on CBS' "Face the Nation."

"But the goal and the purpose now is to make certain that we take advantage of what is now a very good movement forward on the political front to help this Iraqi government," she said.

Powell was chairman of the Joint Chiefs of Staff during the 1991 Gulf War and is known for his belief in deploying decisive force with a clear exit strategy in any conflict.

"The president's military advisers felt that the size of the force was adequate; they may still feel that years later. Some of us don't. I don't," Powell said. "In my perspective, I would have preferred more troops, but you know, this conflict is not over."

"At the time, the president was listening to those who were supposed to be providing him with military advice," Powell said. "They were anticipating a different kind of immediate aftermath of the fall of Baghdad; it turned out to be not exactly as they had anticipated."

Rumsfeld has rejected criticism that he sent too few U.S. troops to Iraq, saying that Franks and generals who oversaw the campaign's planning had determined the overall number of troops, and that he and Bush agreed with them. The recommendation of senior military commanders at the time was about 145,000 troops.

"At the time the president was listening to those who were supposed to be providing him with military advice," he said. "They were anticipating a different kind of aftermath of the fall in Baghdad. It turned out to be not exactly as they had anticipated."

Powell's remarks comes at a sensitive time for U.S. Defence Secretary Donald Rumsfeld, who has been put on the defensive for his leadership on the war, with a number of retired generals calling for his resignation.

They claimed that Rumsfeld arrogantly ignored the advice of senior military in planning for the Iraq invasion, including General Eric Shinseki, the former army chief of staff who in 2003 told U.S. Congress that several hundred thousand troops would be needed for the invasion and subsequent occupation.

But U.S. Secretary of State Condoleezza Rice, when asked to address her predecessor's remarks, told CNN on Sunday that she didnot remember Powell "specifically" voicing dissent on the issue of whether or not the invasion of Iraq was adequately resourced.

"I'm quite certain that there were lots of discussions about how best to fulfil the mission that we went into Iraq (to carry out)," she said. "I have no doubt that all of this was taken into consideration."

Zarqawi is often described as a lieutenant of Osama bin Laden, whose supporters masterminded the September 11, 2001, attacks on New York and Washington.

Mr Scheuer was a CIA agent for 22 years - six of them as head of the agency's Osama bin Laden unit - until he resigned in 2004.

He told Four Corners that during 2002, the Bush Administration received detailed intelligence about Zarqawi's training camp in Iraqi Kurdistan.

Mr Scheuer claims that a July 2002 plan to destroy the camp lapsed because "it was more important not to give the Europeans the impression we were gunslingers".

"Mr Bush had Zarqawi in his sights almost every day for a year before the invasion of Iraq and he didn't shoot because they were wining and dining the French in an effort to get them to assist us in the invasion of Iraq," he told Four Corners.

"Almost every day we sent a package to the White House that had overhead imagery of the house he was staying in. It was a terrorist training camp . . . experimenting with ricin and anthrax . . . any collateral damage there would have been terrorists."

During the lead-up to the invasion of Iraq, Zarqawi's presence in the north of the country was used by US officials to link Saddam Hussein to terrorism.

Zarqawi has twice been sentenced to death by Jordan's state security court.

He was first sentenced in absentia in November 2004 for planning the murder of a US diplomat in Jordan. The second sentence, last December, concerned plans to attack a border post between Iraq and Jordan.

Many thousands of Iraqis have been killed in a relentless insurgent campaign of suicide and car bombings that mostly target U.S. soldiers and Iraq's fledgling security forces.

Nearly 2,400 American soldiers have died in Iraq since the U.S.-led invasion in 2003, many by roadside bombs, and April has been the bloodiest month of the year so far for U.S. forces.

"America, Britain and their allies have achieved nothing but losses, disasters and misfortunes," the Egyptian Islamic militant leader said in the video.

Zawahri, bespectacled and wearing a black turban and a white robe, sat in front of a curtain. He did not appear to have his customary assault rifle next to him.

A statement accompanying the video said it was made in the latter part of the Muslim month, which ended on Friday.

"OVERTHROW MUSHARRAF"

Zawahri also condemned the leaders of Egypt, Jordan and Saudi Arabia as "traitors" for their close ties to the West and Musharraf as a "treacherous criminal."

"It is increasingly clear that President Bush does not have a strategy for victory in Iraq. Rather, he hopes to prevent defeat and pass the problem along to his successor," said Biden and co-author Leslie Gelb, president emeritus of the Council on Foreign Relations.

Iraq's Sunnis, the driving force behind the insurgency, would welcome the partition plan rather than be dominated by a Shiite-controlled central government, Biden said.

He said the division of Iraq would follow the example of Bosnia a decade ago when that war-torn country was partitioned into ethnic federations under the U.S.-brokered Dayton Accords.

Biden billed his plan as a "third option" beyond the "false choice" of continuing the Bush administration policy of nurturing a unity government in Iraq or withdrawing U.S. troops immediately.

As part of the plan, the United States should withdraw most of its troops from Iraq by 2008, except for a small force to combat terrorism, Biden said.

Under Biden's proposal, the Kurdish, Sunni and Shiite regions would each be responsible for their own domestic laws, administration and internal security. The central government would control border defense, foreign affairs and oil revenues.