WASHINGTON (CNN) -- The Iraq Study Group's report given to President Bush on Wednesday says the United States needs to change its strategy to tackle the "grave and deteriorating" situation in Iraq.
Failure to halt the crisis could bring severe consequences to Iraq, the broader region and the United States, the bipartisan panel warned in a report handed to Bush at the White House.
Although panel co-chairs James Baker and Lee Hamilton said in an introductory letter to the report there is no "magic formula to solve the problems of Iraq," the report calls for a "diplomatic offensive" and changing the role of U.S. troops from a combat to an advisory role. (View the complete report -- PDF)
"The current approach is not working and the ability of the United States to influence events is diminishing," Hamilton said in presenting the report. "Our ship of state has hit rough waters. It must now chart a new way forward."
The group's co-chair, said, however, that "not all options have been exhausted."
Among the group's most important recommendations: a change in the primary mission of U.S. forces in Iraq that will allow the United States to move forces out responsibly; prompt action by the Iraqi government to achieve milestones, particularly reconciliation; and new diplomatic actions in Iraq and in the region.
Former Secretary of State James Baker and co-chair with Hamilton, said later in the news conference: "We do not recommend a stay-the-course solution. In our opinion, that approach is no longer viable."
The report suggests: "By the first quarter of 2008, subject to unexpected developments in the security situation on the ground, all combat brigades not necessary for force protection could be out of Iraq."
"At that time, U.S. combat forces in Iraq could be deployed only in units embedded with Iraqi forces, in rapid-reaction and special operations teams and in training, equipping, advising, force protection and search and rescue."
While not recommending a timetable for withdrawal, the report says "the United States must not make an open-ended commitment to keep large numbers of American troops deployed in Iraq."
The report warns of dire consequences, both at home and abroad, if the U.S. fails to take action.