Calling the enemy in Iraq “merciless and violent”, he gave warning that more sacrifices would be needed next year. “We’re not winning, we’re not losing,” he said. He is seriously considering an increase in troop levels.

Mr Bush’s assessment was a striking reversal of a declaration that he made only six weeks ago that “absolutely, we’re winning”. Asked to explain himself, at an end-of-year news conference, Mr Bush said: “I believe we are going to win. And if I didn’t think that I wouldn’t have troops there.”

Mr Bush said that his remarks, in an interview with The Washington Post before the press conference, reflected his belief “that we’re not succeeding nearly as fast as I had wanted”.

The President spoke as Robert Gates, his new Defence Secretary, landed in Iraq to discuss with his top commanders the possibility of a short-term surge of tens of thousands of US troops into Baghdad and Anbar province, an option that the President strongly favours. He will lay out a new plan for Iraq early in the new year.

Mr Gates said that the commanders told him of their concerns about a troop surge and their scepticism about its effectiveness. General George Casey, the senior commander in Iraq, and General John Abizaid, commander of US forces in the Middle East, fear that a troop increase will only delay the time when Iraqis take responsibility for security and could provoke further violence.

Mr Bush insisted that “victory in Iraq is still achievable”. But such strong resistance from the military to the idea of sending more troops highlights how limited the options have become for ending Iraq’s slide into chaos.

Should Mr Bush decide to proceed with the troops option, his path could be eased by the retirement of General Abizaid. A spokesman for the 55-year-old general said that he would go early next year.

Mr Bush acknowledged that 2006 had been a grim year. “The enemies of liberty . . . carried out a deliberate strategy to foment sectarian violence between Sunnis and Shia,” he said, “and over the course of the year they had success.

“Their success hurt our efforts to help the Iraqis rebuild their country. They set back reconciliation and kept Iraq’s unity Government and our coalition from establishing security and stability.” He added that there was unspeakable violence in Iraq.

Recent polls indicate that a significant majority of Americans — two thirds in one survey published yesterday — now oppose the war.

But Mr Bush said that he believed that the Democrat takeover of Congress in last month’s midterm elections was not a message sent by voters to withdraw US troops. Rather, he said, he sees it as a mandate to find new ways to make the mission in Iraq succeed.

Mr Bush was asked whether he was like Lyndon Johnson, the President who had difficulty sleeping during the darkest days of the Vietnam War.

“The most painful part of my presidency is that my decisions have caused young men to lose their lives,” he said. “I read about it every night. My heart breaks every time.” But as he has done since the onset of the insurgency, Mr Bush portrayed Iraq as part of a grand, global clash between the “ideology of freedom” and the “ideology of hate”. Invading Iraq was the right thing to do, he insisted, and failure there would be a catastrophe for America and the world. “I want the enemy to understand that . . . they can’t run us out of the Middle East.

“The advance of liberty has not been easy and Iraq is showing how tough it can be.”

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