US troops and their Iraqi allies are facing a better coordinated and more effective insurgency. Over the last month 81 coalition troops have been killed, the highest tally since November 2005.
The resistance is staging an average of 75 operations a day.
In Ramadi, in the western Anbar province, US troops have been involved in street battles with insurgents for a week.
Baghdad and Fallujah remain the most dangerous places for US troops, while Italian and British soldiers have come under repeated attacks by Shia fighters in the south.
The US plan to shift the burden of counter insurgency onto Iraqi units has been a dismal failure.
Many units will not fire on resistance fighters while others have refused deployment after they have completed training.
On 30 April Iraqi recruits resigned on mass when they discovered they would be deployed outside their home towns. Meanwhile, US officers constantly complain that they train Iraqi troops only to face them on the battlefield.
Attempts to form a compliant Iraqi government has deepened the crisis. After five months of wrangling, Jawad al-Maliki has been appointed prime minister of a government that the New York Times describes as “barricaded inside the Green Zone” and “largely irrelevant to the realities unfolding on the ground”.
Life in the country continues to deteriorate.
An Iraqi minister admitted that over the last three months 14,000 families have fled their homes fearing sectarian attacks, and everyday there is a grim tally of bodies found bound, tortured and executed.
Ordinary Iraqis are barricaded inside their neighbourhoods as up to 20,000 people have been kidnapped by criminal gangs since the beginning of the year.
The electricity supply in the country is close to collapse.
In March 2004, one year into the occupation, a household in Baghdad could expect around 16.4 hours of electricity a day. Two years later this had dropped to 7.5 hours a day.
One in five Iraqi children are malnourished, disease is rife, and less than one in ten homes are connected to the sewage system in what was once one of the most developed countries in the Middle East.
The US has blamed the failure of the reconstruction on the resistance.
But this is only part of the story.
The vast majority of projects were derailed through incompetence, fraud and corruption. In one case US contractors failed to rebuild a section of pipeline destroyed during the invasion.
The contractors – Kellogg Brown & Root, a subsidiary of US multinational Halliburton – drilled the “wrong size” hole, before abandoning the project and walking away with £42 million.
A report by the US Special Inspector General for Iraq Reconstruction discovered that only six out of the promised 150 health clinics have been built since the invasion.
Opposition to the occupation is hardening in Iraq, Britain and the US.
In a poll conducted in January 87 percent of Iraqis wanted US troops to leave as soon as possible.
The latest poll, conducted by the right wing US International Republican Institute, discovered that three out of four Iraqis were pessimistic about the future, with only 51 percent believing life will improve in the next five years, down from 85 percent in a similar poll conducted in April 2005.