Expectations of a peaceful, prosperous and democratic Middle East based on the European model "will not be realized," says Haas. "Much more likely is the emergence of a new Middle East that will cause great harm to itself, the United States, and the world."

Haas writes that the most significant factor contributing to the end of this era has been "the Bush administration's decision to attack Iraq in 2003 and its conduct of the operation and resulting occupation."

Among the casualties of the war in Iraq is the Sunni's domination, a factor "which was strong enough and motivated enough to balance Shiite Iran." This, explains Haas, has given rise to tensions between Sunnis and Shiites. Fighting between the two rival Muslim groups has reached new heights in Iraq with a car bomb claiming more that 160 lives in a single day last week. And in Lebanon tension between the Shiite Hezbollah and Sunnis has reached the point where it could easily tip into armed conflict.

Another casualty of the Iraq war has been the rise of terrorism. Terrorists have gained a base in Iraq where they developed a new set of techniques to export, says Haas. The war in Iraq, says Haas has "reduced U.S. leverage worldwide" by tying down a large number of U.S. troops in the area.

Haas considers this as one of history's ironies. "The first war in Iraq, a war of necessity, marked the beginning of the American era in the Middle East and the second Iraq war, a war of choice, has precipitated its end." The most significant factor contributing to the demise of the U.S. domination in the Middle East, according to Haas, has been the Bush administration's decision to attack Iraq in 2003. Haas also points out other relevant factors such as the "demise of the Middle East peace process" and the "failure of traditional Arab regimes to counter the appeal of radical Islamism."

In the Middle East's new era the United States will be challenged by China, Russia and the European Union. "Iran will be one of the two most powerful states in the region," says Haas. Iran "is the most powerful external influence in Iraq, and holds considerable sway over both Hamas and Hezbollah."

Haas calls the Islamic Republic of Iran "a classic imperial power." Iran has "ambitions to remake the region in its image and the potential to translate its objectives into reality."

Israel, the only country in the region with a nuclear arsenal, still "is in a weaker position today than it was before this summer's crisis in Lebanon."

Iran, Saudi Arabia, and other large oil producers will benefit from the rising price of oil, which Haas believes is "far more likely to exceed $100 (per barrel) than it is to fall below $40."

Haas further predicts "Iraq, traditionally a center of Arab power, will remain messy for years to come, with a weak central government, a divided society, and regular sectarian violence. At worst, it will become a failed state wracked by an all-out civil war that will draw in its neighbors."

The political landscape of the Middle East is changing. "With Arab nationalism and Arab socialism a thing of the past, democracy belongs in the distant future at best," and a number of Arab regimes are "likely to remain authoritarian." Arab unity is a slogan, not a reality, says Haas.

"Islam will continue to make great strides and will continue to fill the intellectual vacuum in the Arab world," he says, adding Islam will provide a foundation for the politics of a majority of the region's inhabitants.

Lack of imagination will continue to hurt Arab countries. Says Haas: "The Middle East's best-known organization, the Arab League, excludes the region's two most powerful states, Israel and Iran." Haas says the continuing war between Arab forces and Israel will "continue to preclude the participation of Israel in any sustained regional relationship." While the "tension between Iran and most Arab states will also frustrate the emergence of regionalism."

The author of the report cautions U.S. policymakers not to be over reliant on brute military force. He points to two instances where two superior powers -- the U.S. in Iraq and Israel in Lebanon -- were unable to achieve their objectives. Secondly, cautions Haas, it would be a mistake "to count on the emergence of democracy to pacify the region."

Creating mature democracies is no easy task, says Haas. If and when the experiment succeeds it takes decades. Among the dangers of the new Middle East is the possibility that "Syria might be more interested in working with Tehran than with Washington."

Washington's shunning of Damascus and Tehran as part of its foreign policy is in fact the absence of a coherent policy. "Diplomacy," writes Haas, "is the best option available to Washington."

Indeed, what seems to be emerging in the Middle East today is a new axis of power with Syria as its main cog and incorporating Iran, Hezbollah and Hamas. And following the re-establishment of relations between Damascus and Baghdad could bring Iraq back into the anti-American fold.

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