U.S. forces in Iraq should be reduced significantly, according to a new study on Iraq's security forces that inflamed debate in Congress on how quickly that can happen without hurling the country into chaos.

The report, authored by a 20-member panel comprised mostly of retired senior military and police officers, said the massive deployment of U.S. forces and sprawl of U.S.-run facilities in and around Baghdad has given Iraqis the impression that Americans are an occupying, permanent force.

Accordingly, the panel said the Iraqis should assume more control of its security and U.S. forces should step back, emboldening Democrats who want troop withdrawals to start this fall.

"Significant reductions, consolidations and realignments would appear to be possible and prudent," wrote the group, led by retired Gen. James Jones, a former Marine Corps commandant.

The recommendation echoed previous independent assessments on the war, including the high-profile Iraq Study Group that said the combat mission could be transferred to the Iraqis by early 2008. But the burning question, left mostly unanswered by the panel, was precisely when Iraqi security units could take control and U.S. troops could leave.

The study concluded only that the Iraqis could not assume control of the country without U.S. help in the next 12 to 18 months.

"We need to start transitioning to an Iraqi lead," no matter the timeframe, said retired Army Gen. George Joulwan, a panel member and former NATO commander in Europe.

"I think the signs are there to do that, and we have to reduce that dependency," he added in testimony before the Senate Armed Services Committee.

The study sparked ongoing debate among committee members on whether to pass legislation ordering troops home.

Democrats want a firm deadline to pressure Iraqi leaders into taking more control. Most Republicans have so far balked at the suggestion, saying military commanders should make the decision.

"There's a lot of people who are armchair generals who reside here in the air-conditioned comfort of Capitol Hill, who somehow do not trust the judgment of some of the finest leaders that our nation has produced," said Sen. John McCain, the top Republican on the Armed Services Committee and a GOP presidential hopeful.

Democrats and Sen. John Warner, R-Va., expressed skepticism that the Iraqis will reach the necessary political consensus without incentive.

"At the end of the day, we have to make judgments on whether or not we believe continuing military presence by American troops -- whether they're in Iraq for a day, a year or 10 years -- will make any difference to the Iraqi government and the Iraqi people," said Sen. Hillary Rodham Clinton, D-N.Y., and another presidential hopeful.

Clinton sent a letter to President Bush on Wednesday, asking him to address 20 questions in his upcoming assessment on Iraq, including why the troop buildup has not prompted a political settlement.

The panel's finding that the U.S. should reduce its visibility in Iraq is not necessarily at odds with the Bush administration. President Bush has long said the combat mission must be transferred to the Iraqis as soon as they can take over and security conditions improve.

But the study suggests that lowering the profile of U.S. forces is a precondition to improving security conditions. It also says helpful "adjustments" could begin in early 2008.

The Pentagon said Thursday that U.S. troop levels -- currently at 168,000 -- are expected to hit a record high of 172,000 in the coming weeks.

When asked by McCain whether he would support a deadline for troop withdrawals, Jones said he would not.

"I think deadlines can work against us," Jones said. "I think a deadline of this magnitude would be against our national interest."

Jones' report, released Thursday, concluded that Iraqi security forces would be unable to take control of their country in the next 18 months. If Iraqi troops were given more of a lead, as envisioned by the panel, it is expected that U.S. troops would still play a substantial role by providing logistics and other support, as well as continued training.

Overall, the study found the Iraqi military, in particular its Army, shows the most promise of becoming a viable, independent security force with time. It predicted an adequate logistics system to support these ground forces is at least two years away.

"They are gaining size and strength, and will increasingly be capable of assuming greater responsibility for Iraq's security," the report says of military units, adding that special forces in particular are "highly capable and extremely effective."

Worse off is the Iraqi police force. It describes them as fragile, ill-equipped and infiltrated by militia forces. And they are led by the Ministry of Interior, which is "a ministry in name only" that is "widely regarded as being dysfunctional and sectarian, and suffers from ineffective leadership."

Jones' panel recommended scrapping Baghdad's national police force and starting over.

The U.S. has spent $19.2 billion developing Iraq's forces and plans to spend another $5.5 billion next year. According to Jones' study, the Iraqi military comprises more than 152,000 service members operating under the Ministry of Defense, while the Ministry of Interior oversees some 194,000 civilian security personnel, including police and border control.

The review is one of several studies Congress commissioned in May, when it agreed to fund the war for several more months but demanded that the Bush administration and outside groups assess U.S. progress in the war.