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LOU DOBBS: President Bush today cited progress in Al Anbar Province and Diyala Province as examples of what can be achieved. The president also said he believes Iraqi Prime Minister al-Maliki understands the need for political reconciliation.

But the prospects for such reconciliation remain uncertain at best, as Michael Ware now reports from Baghdad. Michael?

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MICHAEL WARE, CNN CORRESPONDENT: Lou, with the interim report on the war delivered to Congress and President Bush's remarks, the big picture or state of play of the war has been brought into sharp focus.

Despite what Congress is being told, the truth that emerges is that essentially Iraq is a failing state, riven by sectarian and other agendas, with many powerful factions within this government not sharing American interests and indeed opposed to them. That's why many of the congressional benchmarks that have been set either have not been met or are most likely not going to be met.

That has left the administration with few successes to highlight. Indeed, the president pointed to Anbar Province and the work of the tribes in combating al Qaeda. This has nothing to do with the Iraqi government and more to do with an American deal with the Sunni/Baath insurgency.

This is a deal which, while successful against al Qaeda, is deeply troubling for the Shia-dominated government which America accuses of having links to Iran. Very much, this is a mixed bag. And it's very clear that, whatever is being said in D.C., there is still a long, long way to go before there's any kind of victory -- Lou.

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DOBBS: Michael Ware reporting from Baghdad.