French President Jacques Chirac gave a tough, cutting analysis of the fallout from the U.S.-led invasion of Iraq in 2003, saying it destabilized the entire Middle East and allowed terrorism to spread.

Chirac, speaking Friday in his annual New Year's message to French ambassadors, said the problems in Iraq today justified France's strong opposition to the invasion.

"As France foresaw and feared, the war in Iraq caused upheavals whose effects have not yet finished unraveling," he said.

"The venture exacerbated the divisions between (Iraqi) communities and undermined the very integrity of Iraq," he said. "It weakened the stability of the region, where every country is now worried about its security and independence. It gave terrorism new terrain for expansion."

Now, "more than ever, the priority is to return sovereignty to the Iraqis," Chirac said.

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