THE US President, George Bush, has given his strongest indication yet that he intends to continue with plans to increase troop numbers in Iraq after the September 15 report to Congress, when he delivered an upbeat assessment of military progress and a more positive view of the political outlook.
He also warned that pulling out of Iraq would harm US interests in the Middle East for decades and expose America to the threat of increased terrorism and a nuclear arms race in the region by allowing al-Qaeda-backed Sunni extremists to flourish and Shiite extremism in Iran to spread. 
The Iranian President, Mahmoud Ahmadinejad, added fuel to the fire on Tuesday, saying that America’s power in Iraq was rapidly collapsing and that Iran was ready to step in to help fill the vacuum.
In the Iraqi city of Karbala, about 100 kilometres south of Baghdad, riots that left at least 52 people dead and 206 injured continued yesterday, as more troops and police were trucked in by Iraqi authorities. Gun battles between rival Shiite groups escalated, causing hundreds of thousands of pilgrims to flee after a two-day religious festival.
An indefinite curfew has been imposed on the city, which had earlier been the scene of jubilation and religious fervour, as thousands walked for hours to pray at the shrines of Muhammad al-Mahdi, a revered Shiite cleric. Violence reportedly broke out when police tried to confiscate weapons at entrances to the shrines.
Many of the gunmen were linked to Moqtada al-Sadr, the influential preacher whose followers make up Iraq’s largest Shiite militia, the Mahdi Army.
During recent months, the militants have been fighting the Badr Organisation, a rival Shiite group, whose followers include many of the region’s police officers, for control of southern Iraq.
Mr Bush, who was speaking at the annual American Legion convention in Reno, Nevada, on Tuesday, painted a graphic picture of what would happen in the Middle East if the US pulled out.
“Extremists of all strains could be emboldened by the knowledge that they forced America to retreat,” he said. “Terrorists could have more safe havens to conduct attacks on Americans and our friends and allies. Iran could conclude we were weak and could not stop them gaining nuclear weapons.”
He also warned that once Iran had nuclear weapons it would set off a nuclear arms race in the region. It would allow extremists to control a key part of the world’s energy supply and hold the Western world to ransom.
But the President did not mention military action against Iran - something some advisers are urging him to consider - instead stressing that the US was pursuing a diplomatic strategy of isolating Iran through a united front on economic sanctions.
It was not all gloom and doom. Mr Bush also gave his most upbeat assessment of the progress in Iraq to date, quashing speculation in Washington that the Administration wants the Prime Minister, Nouri al-Maliki, replaced and was contemplating whether the form of consensus democracy it had installed in Iraq was viable.
“There are unmistakable signs that our strategy is achieving the objectives we set out. Our new strategy is showing results in the places where it matters most - the cities and neighbourhoods where ordinary Iraqis live,” he said.
In a news conference broadcast live on Iranian state television on Tuesday, Mr Ahmadinejad said that the political power “of the occupiers [of Iraq] is being destroyed rapidly and very soon we will be witnessing a great power vacuum in the region”.
“We, with the help of regional friends and the Iraqi nation, are ready to fill this void,” he said.
He also rejected reports that Iran had slowed sensitive nuclear work which the West fears is aimed at making nuclear bombs, and said it would respond if the US went ahead and branded the elite Revolutionary Guards a terrorist force.
Mr Bush plans to ask Congress next month for up to $US50 billion ($61 billion) in additional funding for the war in Iraq, a White House official said on Tuesday, a move that appears to reflect increasing White House confidence that it can fend off congressional calls for a rapid drawback of forces.
The request - which would be in addition to about $US460 billion in the fiscal 2008 defence budget and $US147 billion in a pending supplemental bill to fund the wars in Afghanistan and Iraq - is expected to be announced after congressional hearings scheduled for mid-September.
Copyright © 2007. The Sydney Morning Herald.
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