By Andrew Gray

WASHINGTON, July 12 (Reuters) - The Bush administration's new Iraq report paints a picture of Iraqi security forces still plagued by sectarianism and heavily dependent on U.S. troops to conduct operations.

The portrayal, in the report measuring Iraqi authorities against benchmarks laid down by the U.S. Congress, is bound to raise fresh questions about the sustainability of any gains made by the current U.S. troop increase in Iraq.

"Left on their own, many ISF (Iraqi Security Force) units still tend to gravitate to old habits of sectarianism when applying the law," said the report, issued by the White House on Thursday.

The report graded Iraq "not satisfactory" in terms of increasing units that could operate without U.S. help, allowing Iraqi forces to work without political interference and enforcing the law even-handedly.

It said progress in stopping false, politically motivated accusations against members of the Iraqi security forces was also "not satisfactory."

A key element of U.S. strategy is building up Iraqi security forces so they can take over more responsibility and allow U.S. troops to go home. The U.S. military says it has trained and equipped more than 353,000 members of Iraq's security forces.

But the report said there had actually been a "slight reduction" since January in the number of Iraqi units judged capable of operating independently of U.S. forces. It did not provide figures.

A U.S. senior defense official said the report was only a snapshot of capabilities. He said more and more Iraqi units were joining the fight against insurgents, and were suffering casualty rates three times higher than U.S. forces.

"We remain confident that they are on program for taking over more and more responsibility," said the official, briefing journalists on the report on condition of anonymity.

SECTARIAN BIAS

Aside from the technical capabilities of Iraqi units, the report also highlighted the problem of sectarianism inside the security forces as the United States seeks to curb violence between Iraq's Shi'ite Muslim majority and Sunni minority.

Sunnis accuse Iraq's Shi'ite-led government of using security forces and militias to persecute them.

"There continues to be evidence of sectarian bias in the appointment of senior military and police commanders, which in turn gives rise to suspicions that political considerations may be behind Iraqi commanders' decisions on which operations to undertake or support," the report said.

It said senior Iraqi officials responsible for human rights abuses continued to hold important positions.

The report documented concerns about the work of Iraq's Office of the Commander in Chief, which reports to Shi'ite Prime Minister Nouri al-Maliki.

"There is evidence of target lists emanating from the Office of the Commander in Chief that bypassed operational commanders and directed lower-level intelligence officers and commanders to make arrests, primarily of Sunnis," it said.

The senior defense official said the office had been "an unhelpful organization" in the past and measures had been taken to reform the way it operated.

"We would expect that that still could use additional progress," he said.

AlertNet news is provided by