It was painful last week to watch President Bush toss away what may be his last chance to head off total Iraq disaster.

The president believes that, by rejecting his critics in Congress, he’s cementing his place as another Churchill. More likely he will be remembered as the opposite of a Churchill. He clings to an approach that divides rather than unites the home front, while promoting a “victory” formula that can’t work in Iraq.

Let’s start with the White House formula for “victory.” The president says we are working to “aid the rise of an Iraqi government” that can secure its own country and deliver services to its people. Such a functional government is crucial to the drawdown of U.S. troops.

But there’s a crucial flaw in the formula, of which U.S. military commanders are painfully aware. Despite some recent U.S. security gains, the Iraqi government remains dysfunctional and divided by sect. The political system that the United States devised for Iraq created a weak central government and sectarian parties. The Iraqi police and the military (to a lesser extent) are penetrated by sectarian militias.

So despite any surge gains, these Iraqi forces would probably split along sectarian lines as soon as U.S. troops departed. Iraq would collapse into a more intense civil war.

This flaw in the president’s formula was in full view last week when he had to admit that the Iraqi government has failed so far to meet the most crucial benchmarks for reconciliation. Nor will it meet those benchmarks in the foreseeable future; certainly not by September, when Gen. David Petraeus and Ambassador Ryan Crocker will give a much awaited progress report.

Instead of confronting realities, the president hangs tough and tells his congressional critics to wait until fall. By then, as the statesmanlike Republican Sen. Richard Lugar has warned, the full passion of the U.S. election campaign will be upon us, polarizing congressional debate. The pressure for a swift exit from Iraq will intensify.

If we don’t address Iraq realities now, Lugar says, “our involvement in Iraq will end in a poorly planned withdrawal that undercuts our vital interests in the Middle East.”

Lugar has pleaded with the White House to take a more bipartisan approach to the Iraq dilemma. Bush, of course, has stuck to his Karl Rovian posture – standing firm against attack by facts. Were Bush to listen to Lugar, the barest chance exists that he could find a way out of his double dilemma and rally bipartisan support for a policy addressing the real Iraq.

Such a policy would formally endorse the report of the bipartisan Iraq Study Group, which Bush has verbally applauded but rebuffed in practice. The report has flaws but contains crucial recommendations that could give Bush – and Congress – a cover to do what’s needed. Foremost among them is the call for an intensive diplomatic initiative on Iraq.

Iraqi Sunni and Shiite sects – inside and outside the Iraqi government – cannot reconcile on their own, even if the U.S. military makes some progress in weakening militant groups. Nor can pressure from the White House or Congress force them to unite. Something more is needed: a change in the psychological dynamic in the Mideast region.

That change could come from a major diplomatic push on Iraq, involving the United Nations as a cover, but also bringing in Iraq’s Sunni Arab neighbors and Iran.

The White House has paid lip service to such diplomacy, but hasn’t been serious. Bush is preparing to send Secretary of State Condoleezza Rice on yet another fruitless Mideast visit. This is not what’s required.

What’s needed is a congressional push for diplomacy, which the president joins. Here’s the vehicle: Among several amendments the Senate is considering on Iraq (all tied to the defense authorization bill) is a bipartisan call for implementation of the ISG recommendations. Pennsylvania’s Democratic Sen. Bob Casey is one of the co-sponsors.

Casey thinks this is the only amendment with a chance to get the 60 votes in the Senate required to shut off debate. “I sense some momentum on this,” he says, “but there is not a rushing current.”

There should be. And if Bush were smart, he would join in and use the ISG report as a cover to do what he’s avoided: putting all of America’s withering diplomatic muscle behind a push to stabilize the entire Mideast region.

Red lines would have to be established against meddling by neighbors in Iraq. Serious U.S. interaction with Iran and Syria would be required. Dreams of regime change would have to be dropped. A special U.S. negotiator would be required – preferably Bush pere’s consigliere, James Baker, co-author of the ISG report.

Any schedule for U.S. withdrawal – and the ISG report calls for a drawdown – would come in tandem with progress in these talks. The prospect of a U.S. exit, and its timing, could be used as leverage to get Iraq’s neighbors to help.

Sound like a pipe dream? Not necessarily, if those senators who understand the cost of an Iraq debacle pull together. Maybe it would take a delegation of a dozen Republican senators visiting Bush at the White House – a Hugh Scott moment – to convey the message that this is the president’s last chance to salvage some honor. Now is the moment, senators, for us and Iraq.