'We Could Lose This Situation'

CIA Says Insurgents Now 50,000 Strong

The White House yesterday drew up emergency plans to accelerate the transfer of power in Iraq after being shown a devastating CIA report warning that the guerrilla war was in danger of escalating out of US control.

Although, the report was an internal CIA document it was widely circulated within the administration. Even more unusually, it carried an endorsement by Paul Bremer, the civilian head of the US-run occupation of Iraq - a possible sign that he was seeking to bypass his superiors in the Pentagon and send a message directly to President George Bush on how bad the situation has become.

Proof of the strength of the insurgents and their ability to strike anywhere in Iraq was provided in another devastating suicide bombing yesterday.

This time the target was the Italian military police barracks in the south-eastern city of Nasariya.

At least 17 Italians and eight Iraqis were killed, striking a blow at one of the few nations prepared to send troops to help the US and Britain contain the rising violence.