The Iraq Study Group, a bipartisan panel chaired by Bush Senior consigliere James Baker and former Democrat Congressman Lee Hamilton has reported back. Their key finding is that the current US strategy of "staying the course" is not working, and that unless the US changes tack, Iraq will slide into chaos (that's funny; I thought it was there already). To prevent this, they recommend a switch from combat operations to supporting Iraqi troops - "Iraqification", in other words - and a withdrawal of most US combat forces by early 2008.
President Bush has said that he will take the report's advice "very seriously", but given that they are effectively asking him to admit that he made a mistake, I regard that as unlikely. Likewise, I don't expect the Bush administration to make more than token efforts to engage with Iraq's neighbours to find a solution. Besides which, contrary to the report's assessment, Iran does benefit from an unstable Iraq - or rather, they benefit from having America tied up and bleeding there. And as Simon Jenkins notes, they're happy to see the "Great Satan" drive himself to hell in a handcart.
So, in short, I don't expect this to result in any great policy change from the Bush Administration. The faith-based Presidency's solution to being in a hole is to keep on digging in an effort to prove their willpower, and it’s unlikely they'll start paying attention to reality any time soon.