U.S. considers more troops for Iraq

U.S. costs for the Iraq war will exceed $110 billion in the fiscal year through October 2007 -- more than $2 billion a week -- approaching the record reached in the prior fiscal year, White House budget director Rob Portman said on Tuesday.

He declined to comment on the possible cost of sending an extra 20,000 troops to Iraq.

A prominent think-tank on Tuesday joined the chorus pressing for a radical rethink on Iraq.

The Brussels-based International Crisis Group (ICG) said an international effort was needed to prevent Iraq collapsing into a "failed and fragmented state" whose Shi'ite-Sunni Arab conflict could draw in its neighbors in a proxy war.

"Hollowed-out and fatally weakened, the Iraqi state today is prey to armed militias, sectarian forces and a political class that, by putting short-term personal benefit ahead of long term national interests, is complicit in Iraq's tragic destruction."

The Pentagon said the Mehdi Army militia of radical Shi'ite cleric Moqtada al-Sadr had replaced al Qaeda as the biggest threat to security.

Shi'ite Prime Minister Nuri al-Maliki, who owes his position to Sadr's support, has vowed to dismantle the militias but has done little so far to rein them in. The Pentagon report said the Mehdi Army exerted "significant influence" over the government.

The ICG warned in its report of tensions between the Mehdi Army and the Badr Brigades, a militia loyal to the powerful Supreme Council for Islamic Revolution in Iraq.

"Both Shi'ite paramilitary groups are engaged in a dangerous tug-of-war over the holy city of Najaf," the report said.

It took issue with the Iraq Study Group's call to speed up the handover of security control to Iraqi forces, even as U.S. officials prepared to hand over Najaf Wednesday.

Iraq's vice president said he favored a timetable for a withdrawal but that troops could not leave until Iraqi forces were able to handle the situation on their own.

"We work closely with the Americans who want their soldiers home. But withdrawal cannot come before the Iraqi forces are capable of handling the situation on their own," Tareq al-Hashemi told reporters in New York after talks with United Nations Secretary-general Kofi Annan.

(Additional reporting by Ross Colvin in Baghdad and Caren Bohan and Andrew Gray in Washington)