The three-quarters mark.

• Author: Haass, Richard N.

THE BUSH Administration enters its final two years of office facing a number of difficult and pressing challenges around the world, including, but in no way limited to, Iraq, Iran and North Korea. This is taking place at a time when the country is bogged down militarily, divided politically, stretched economically and dependent on huge amounts of imported energy. Together, it makes for the most demanding strategic situation faced by the United States since the Berlin Wall came down--and arguably since the end of the Second World War.

To be sure, it is not all gloom and doom. The likelihood of major power conflict, the defining characteristic of much of contemporary history, is negligible, a reality that frees a still-powerful United States to focus on the global and regional challenges of the day, on occasion with China, India, Russia, Japan and Europe as partners. Europe, the principal theater of twentieth-century conflict, is today a region of unprecedented stability, democracy and prosperity. World economic performance is robust.

Alas, these positives do not offset the negatives. The United States is paying and will continue to pay an enormous price for the ill-conceived and even more poorly implemented policy of transformation in Iraq. Hopes that regime change in Iraq would lead to a broader political transformation of the Middle East were unfounded. Events in Iraq have disillusioned many in the Arab world given the violence and the loss of Sunni political primacy. Iraq is likely to be a messy and somewhat dysfunctional country for years or even decades to come; at worst, it could become a failed state characterized by civil conflict that invariably draws in several of its neighbors. It is increasingly clear that Iraq, a classic war of choice, was a bad choice.

There is then the threat posed by North Korea's nuclear weapons capability, dramatically demonstrated by its October 2006 nuclear test, and by Iran's apparent determination to proceed with plans to develop an indigenous capacity to enrich uranium, thereby giving it the potential to develop nuclear weapons of its own. Iran-backed Hizballah is more of a power in Lebanon; Iran-backed Hamas is more powerful in the Palestinian territories. The Middle East peace process is moribund. Afghanistan is beginning to show some of the same strategic deterioration seen in Iraq. Genocide continues in Western Sudan; unrest is growing in Nigeria; anti-American populists, fueled by revenues from oil and gas exports, are gaining ground in several Latin American countries.

Global challenges are similarly numerous...