If you’re interested in this subject, you’ve probably already discovered the controversial NIE already.  The "key judgments" section  was declassified by Bush and is available here [PDF format].

Even though the released portion of the NIE is three pages long, let me provide a summary of the summary done by Midtopia:

Good news
1. We’ve seriously damaged the leadership of Al-Qaeda.

2. The ultimate political aim of jihadists — conservative Sharia government — is opposed by the vast majority of Muslims.

3. Prominent Muslim clerics have begun condemning Islamic violence with increasing punch and frequency.

Bad news
1. Al-Qaeda remains a serious threat to the U.S. homeland and has grown less centralized, making it harder to penetrate.

2. The number of jihadists is growing, both in numbers and geographic reach.

3. Expect more attacks in Europe, often from home-grown radicals.

4. Iraq is proving a great training and breeding ground for terrorist leaders, breeding a "deep resentment" of the United States and increasing support for jihadist movements.

5. The factors fueling terrorism currently outweigh the factors restraining it, and will continue to do so for the forseeable future.

6. Sunni extremist organizations other than Al-Qaeda are likely to expand their reach unless countered, perhaps obtaining the ability for large-scale terror attacks. However, they pose little threat to the U.S. homeland itself.

Predictions and suggestions
1. Addressing the underlying factors that produce terrorism — autocratic governments that are corrupt and unjust, fear of Western domination, Iraq, lack of social and economic reforms and pervasive anti-U.S. sentiment — will help fight it. But the instability inherent in such transitions will provide jihadists with short-term advantages.

2. If jihadists feel they have lost in Iraq, it will dampen their fervor and hinder recruitment.

I’m sure war supporters will latch on to the first item under "Good news" and the last item under "Predictions" to say "We’re beating Al-Qaeda, and Iraq is where we’ll break the back of terrorism."

But that’s misreading the document. We’ve done great harm to Al-Qaeda, true — and good for us. But that has almost nothing to do with Iraq. And the gist of the NIE is that Al-Qaeda is resilient and still our biggest threat.

As for Iraq, let me break the report down for you.

The NIE first states what is: Iraq is a breeding and training ground for terrorists, and inspiring growth in jihadi ranks worldwide. This is likely to continue for the forseeable future, and the report lists "Iraq" as one of the four underlying factors fueling militant Islam.

On the whole, the NIE is extremely negative, and the bottom line is unambiguous: The Iraq War has worsened the threat of terrorism and made us less safer.

Bush declassified this section (after it was leaked to the New York Times), thinking it would exonerate him.  Specifically, he agreed with the document’s conclusion "that because of our successes against the leadership of al-Qaeda, the enemy is becoming more diffuse and independent."

The problem, as the NIE makes clear, is that a more diffuse and independent enemy is a BAD thing.  Why?  Because we can’t penetrate an enemy that is diffuse and independent.  The report says that explicitly:

New jihadist networks and cells, with anti-American agendas, are increasingly likely to emerge. The confluence of shared purpose and dispersed actors will make it harder to find and undermine jihadist groups.

Yesterday, Bush called his critics "naive".  But only Bush, it seems, thinks the NIE actually paints the Iraq War as a good thing in terms of the Global War on Terrorism.  Even Fox News has the headline: "Iraq a ‘Cause Celebre’ for Extremists, Intel Report Says".  And remember, this is only 10% of the complete NIE — the part that Bush released.  How bad is the rest of it  – the part we haven’t seen?

But what really scares me is how the Administration is spinning this thing.  Take a look at this press briefing last night by Homleand Security Advisor Frances Townsend:

Let me just briefly walk you through the key judgments….

It goes on to talk about networks and cells that are spreading and adapting to our counterterrorism efforts, as well as further down that the global jihadist movement is decentralized, lacks a coherent global strategy and is becoming more diffuse.

Okay.  The report says that our enemy is becoming decentralized.  Hold that thought, and continue.

As you know, the President’s newly released National Strategy for Counterterrorism, on page four of that, does reference this point, remarking that the terrorists today are more dispersed and less centralized. The President, in his speech on September 5th, noted that the terrorist threat is more dispersed and self-directed.

Okay.  So even the President has acknowledged that the terrorist threat is decentralized.  Sounds like everyone is on the same page, right?

This really underscores the President’s point about the importance of our winning in Iraq. On September 5th, the President, in his speech, said, "Iraq is not a distraction from their war on America, it is the central battlefield, where the outcome of this struggle will be decided."

Wait, what?

That’s what we lawyers call a contradiction.  If the enemy has become "decentralized" then how can Iraq be "the central battlefield"?

Will some intrepid reporter ask the President to explain this?

ANOTHER OBSERVATION:  The right-wing talking about about the run-up to the Iraq War is essentially this: "The intelligence was bad, so it’s the fault of the intelligence community."  Well, Bush’s interpretation of the current NIE suggests to me that the maybe the intelligence community is right, and the Bush Administration simply doesn’t know how to read.

UPDATE:  Yeah.  Nothing says it like graphs.  This graph is compiled from data that the CIA gave the State Department.

ANOTHER GOOD POINT from the New York Times:

Three years ago, Secretary of Defense Donald H. Rumsfeld wrote a memo to his colleagues in the Pentagon posing a critical question in the "long war” against terrorism: Is Washington’s strategy successfully killing or capturing terrorists faster than new enemies are being created?

Until Tuesday, the government had not publicly issued an authoritative answer. But the newly declassified National Intelligence Estimate on terrorism does exactly that, and it concludes that the administration has failed the Rumsfeld test.

THE ANONYMOUS LIBERAL decimates an emerging rightwing meme:

Goldberg writes:

Since when is any large, important, task required to show positive results at every stage? Declaring war on Japan increased the threat of war from Germany dramatically. And waging war on both countries, obviously, made things less safe for Americans in the short run.

But these historical comparisons are entirely inapposite. It is one thing to accept a short-term increase in danger in exchange for eventual victory. But where’s the light at the end of the tunnel in Iraq? The ostensible purpose of our invasion of Iraq was to reduce the threat of terrorism, at least in the long term. Does anyone still think that’s a likely outcome?

Moreover, when we fought Japan and Germany, we had very different goals. We were trying to defeat enemy states. We could be confident that if we toppled those regimes, the violence would cease. But when you are fighting a group of stateless jihadists, the only way to make progress is to reduce the number of jihadists. If your strategy results in a net increase in the number of jihadists, it is, almost by definition, a bad strategy.

Sooner or later, the defenders of the Iraq invasion are going to have to face this reality honestly. A losing strategy can only be spun for so long.

Also:

When you are fighting a group of stateless terrorists, you can only win by reducing the total number of terrorists in the world. There’s just no way around that basic equation.

It therefore makes zero sense to pursue a policy that leads to a net increase in terrorists. Is that really so hard to understand?