For months the American people have heard, from one side, promises to "stay the course" in Iraq (George W. Bush); and from the other side, equally vague plans for gradual withdrawal (John Kerry). Both plans depend heavily on building significant Iraqi forces to take over security. But the truth is, neither party is fully reckoning with the reality of Iraqwhich is that the insurgents, by most accounts, are winning. Even Secretary of State Colin Powell, a former general who stays in touch with the Joint Chiefs, has acknowledged this privately to friends in recent weeks, NEWSWEEK has learned. The insurgents have effectively created a reign of terror throughout the country, killing thousands, driving Iraqi elites and technocrats into exile and scaring foreigners out. "Things are getting really bad," a senior Iraqi official in interim Prime Minister Ayad Allawi's government told NEWSWEEK last week. "The initiative is in [the insurgents'] hands right now. This approach of being lenient and accommodating has really backfired. They see this as weakness."
