There is no "magic formula" to solve the crisis in Iraq, a major report on US policy in the country says.

But the Iraq Study Group (ISG) report also says that not all options have been exhausted, and urges talks with Iran and Syria.

While endorsing the need for a policy shift, it stops short of a firm timetable for a troop pullout.

President Bush said the report would be taken "very seriously" and pledged to "act in a timely fashion".

It brings a "tough assessment" and "some really very interesting proposals," he said.

Washington has so far refused to hold direct talks with Iran and Syria.

The report also calls for renewed US efforts to resolve the wider conflict in the Middle East.

'Humanitarian catastrophe'

Correspondents say the widely-leaked review offers no big surprises and no quick fixes.

The 142-page report includes 79 recommendations, of which three are key:

·  A change in the primary mission of US forces in Iraq to enable it to begin to move combat forces out responsibly

·   Prompt action by the Iraqi government to achieve reconciliation

·   New and enhanced diplomatic efforts in the region

The ISG had been expected to recommend a gradual phased withdrawal of US troops over the next 18 months.

But White House spokesman Tony Snow emphasized there was "no timetable" and "no recommendation for immediate withdrawal".

However, the review recommended that the US "engage directly with Iran and Syria", and that Washington should "consider incentives and disincentives" for the two nations.

Speaking ahead of the report, Syria repeated its willingness to co-operate with the US, and said it was in Syria's interest to help Iraq.

But correspondents say the president appears unlikely to heed the call for more engagement with Syria and Iran, amid efforts by the administration to isolate both states.

The report also raises the consequences of continued decline in the situation in Iraq.

It warns that if the situation worsens, there is a risk of a "slide toward chaos (that) could trigger the collapse of Iraq's government and a humanitarian catastrophe".

"Neighboring countries could intervene... The global standing of the United States could be diminished. Americans could become more polarized."

Dozens interviewed

The 10-member panel, headed by former Secretary of State James Baker, has been working since April to come up with recommendations.

The ISG has met or spoken to more than 170 individuals, including Iraq's leaders, President Bush, UK Prime Minister Tony Blair, ambassadors and other senior officials from among Iraq's neighbors and the US.

Hundreds of others have fed their suggestions to four working groups, which have written analytical papers for the panel's benefit.

Mr Blair arrived in Washington on Wednesday for a visit which will include meetings with President Bush and congressional leaders.

Photo Caption

Smoke rises over Baghdad after three car bombs explode (2 December)