The Americans probably never expected things to turn out this way: among the external actors, the biggest loser of the Iraq war so far has been the United States.

US standing in the world, especially in the Arab/Muslim world, has been damaged. Its policies in Iraq and the Middle East are perceived as unilateral and unwise, betraying poor understanding of the problems and an over-emphasis on military/security instruments. Growing instability in Iraq and rising anti-Americanism in the Arab and Muslim world are combining to produce unease even among America's friends and allies.

Pro-American Arab regimes find themselves under pressure as radical groups, including Al Qaeda, try to turn the tide of anti-American feeling — fuelled by developments in Iraq and by America's perceived support of Israel — against them. The grand American scheme for reform in the Middle East — the Greater Middle East Initiative — looks doomed. It has become politically perilous for Arab leaders to embrace such an openly madein-America project.

On the US domestic front, questions multiply about the way Iraq has been handled. If more bad news keeps on in November could be affected.

The Iraq war has also stretched American military forces. Given the demands on the military of the conflict in Afghanistan and the war against terrorism, the US cannot afford to fight another significant war without major increases in military manpower and defence expenditures, with their attendant economic and political costs.

Arguably the biggest and most obvious gainers of the Iraq imbroglio so far have been Islamic radicalism and terrorism, both of which have received a significant boost. In Iraq the terrorists have found a new ground for breeding radical Muslims and turning out a new generation of jihadists. Al Qaeda web-sites have, since the outbreak of the Iraq war, been urging Muslims to go to Iraq to fight the Americans. Most of those who have heeded this call so far are from Arab countries near Iraq and from Western Europe.

Al Qaeda-linked and other radical groups have also begun to use terrorist outrages to pressurise states with troops in Iraq to withdraw them. The Madrid bombings in late March 2004 illustrate this. We can expect more terrorist outrages aimed at getting more countries to withdraw their troops from Iraq.