BAGHDAD - IRAQ will on Thursday mark the fifth anniversary of the US-led invasion that toppled brutal dictator Saddam Hussein, but also plunged a nation of 26 million people into chaos and bloodshed.

On March 20, 2003, US warplanes dropped the first bombs on Baghdad to announce an invasion that would within three weeks topple Saddam's tyrannical regime and leave US forces in charge of a resentful and rebellious people.

Five years on, Iraqis and US forces still face daily attacks from insurgent gangs and Islamist militants, and fighting between armed factions from both sides of Iraq's Sunni-Shi'ite sectarian divide rages on.

According to pre-released extracts, Mr Bush will acknowledge that the war has 'come at a high cost in lives and treasure,' but will defend both the decision to invade and to boost the number of US troops in Iraq last year.

'The answers are clear to me: removing Saddam Hussein from power was the right decision - and this is a fight America can and must win,' he will say, in a speech at the Pentagon, US military headquarters.

Anti-war activists are not impressed.

'The war was based on lies. One million Iraqis have died, five million have been made refugees, tens of thousands of US soldiers and marines have been killed or wounded,' said protest leader Brian Becker of the ANSWER Coalition.

Mr Bush has taken heart from recent signs that the bloodshed in Iraq has fallen, but even US commander General David Petraeus admits that the country has made insufficient progress towards national reconciliation.

'Scoring a military victory is easy, but a political victory is more difficult to achieve,' said Mr Mustapha Alani, director of security studies at the Dubai-based Gulf Research Centre.

He said Washington had dismantled Saddam's regime and was now 'unable to put it back together'.

The day-to-day reality on the ground is grim.

The war has killed more than 4,000 US and allied soldiers and tens of thousands of Iraqi civilians - between 104,000 and 223,000 died between March 2003 and June 2006 alone, according to the World Health Organisation (WHO).

The International Committee of the Red Cross, in its latest report, said the plight of millions of Iraqis who still have little or no access to clean water, sanitation or health care was the 'most critical in the world'.

Nevertheless, there has been progess towards peace in large areas of southern and cnetral Iraq, where the situation is far less violent than it was even a year ago.

A 'surge' in US forces, which over the past year increased the level of troops to more than 160,000, has helped reduce the violence, and tens of thousands of Sunni former insurgents have been recruited to fight Al-Qaeda.

At the same time, radical Shi'ite cleric Moqtada al-Sadr has ordered his powerful Mahdi Army militia to refrain from attacks on Iraqi civilians and security forces.

Insurgents, however, continue to carry out spectacular attacks.

On Tuesday, at a national unity conference Shiite Prime Minister Nuri al-Maliki boasted that Iraq's sectarian civil war was over, but political bickering continues to undermine the work of his coalition government.

The economy, the main concern of Iraqis after security, is also a wreck.

Unemployment is running at between 25 and 50 per cent of the workforce, according to government figures.

Oil exports are the country's main money-earner and a key source of contention between rival political factions.

Iraqi officials say production is at 2.9 million barrels a day, higher than pre-war levels, oil analysts believe it is really around 2.2 million.

Public services like water and electricity have yet to be fully restored, despite billions of dollars having been spent on often badly managed reconstruction projects.

Government calls for Iraqi refugees to return to help rebuild the country have been largely ignored. Fewer than 50,000 have returned from neighbouring Jordan and Syria, while more than two million have fled.

Iraq's parliament has been paralysed by competition between parties driven by sectarian interests.

Last year, the US embassy in Baghdad documented a high level of corruption at all levels of government, and questioned the Maliki administration's willingness to crack down on crooked practices.

The war is estimated to have already cost Washington more than 400 billion dollars - making it the most expensive conflict in history.

And what have Americans got for their money? US credibility in the Middle East has been eroded; the influence of Iran, Washington's enemy, has grown; and the price of oil has spiked to record levels, with catastrophic repercussions on the global economy. -- AFP

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