Washington ? The Iraqi government is strained by rampant violence, deep sectarian differences among its political parties and stymied leadership, the nation’s top spy analysts concluded in a sobering assessment released Thursday.

With the country teetering between success and failure in the next year, Iraq’s neighbors will continue to try to expand their leverage in the fractured state in anticipation that the United States will soon leave, the new report found.

It predicted the Iraqi government “will become more precarious over the next six to 12 months” because of criticism from various Shiite, Sunni and Kurdish factions. “To date, Iraqi political leaders remain unable to govern effectively,” it said.

There was a glimmer of backhanded hope for the Iraqi leadership in the often dark analysis: Iraqi Prime Minister Nouri al-Maliki will continue to benefit from the belief among other Shiite leaders that “searching for a replacement could paralyze the government.”

The new National Intelligence Estimate was an update of another high-level assessment prepared six months ago by the top analysts scattered across all 16 U.S. spy agencies. The CIA and Defense Intelligence Agency were the key contributors to Thursday’s report, which found some security progress but elusive hopes for reconciliation among Iraq’s feuding groups.

It came at a time of renewed tensions between Washington and Baghdad, and as the Bush administration prepares a mid-September report on how this year’s troop buildup in Iraq is working.

Overall, the report finds that Iraq’s security will continue to “improve modestly” over the next six to 12 months, provided that coalition forces mount strong counterinsurgency operations and mentor Iraqi forces. But even then, violence levels will remain high as the country struggles to achieve national political reconciliation.

“The strains of the security situation and absence of key leaders have stalled internal political debates, slowed national decision-making, and increased Maliki’s vulnerability” to factions that could form a rivaling coalition, the document says.

U.S. Ambassador to Iraq Ryan Crocker and the top U.S. commander in Iraq, Gen. David Petraeus, are due to report next month on how much progress is being made with the buildup, which now has some 162,000 troops, the highest of the four-year-old war.

Among the polarizing questions facing U.S. policymakers is whether and how to reduce the number of forces stationed in Iraq. The intelligence report warns against scaling back the mission of U.S. forces. Analysts found that changing the U.S. military’s mission from its current focus – countering insurgents and stabilizing the country – in favor of supporting Iraqi forces and stopping terrorists would hurt the security gains of the last six months. The report said there has been measurable, but uneven, progress.