An al Qaeda campaign to establish an Islamist state in Iraq capable of rivaling the U.S.-backed government in Baghdad has drawn limited support from Sunni insurgents, intelligence sources and analysts say.

But its prospects could improve if sectarian violence between Iraq’s Sunnis and Shi’ites spirals further out of control, increasing the likelihood that an al Qaeda safe haven could be created in the country, analysts say.

Fear of the militant group creating such a haven was one of the reasons cited by President George W. Bush for the 2003 invasion that toppled President Saddam Hussein and has remained a prime motive for the U.S. military presence in Iraq.

U.S. intelligence officials say the so-called Islamic State in Iraq, announced on October 15, is more than a propaganda move by the Iraqi branch of Osama bin Laden’s militant network.

“They’re trying to form another government. They’re fighting for legitimacy outside the current government set-up,” said one intelligence official, who asked not to be identified because the matter involves classified information.

Another U.S. official, who also spoke on condition of anonymity, described the October announcement as a “statement of intent”, rather than a reality, by al Qaeda, the group behind the September 11 attacks on the United States.

Al Qaeda second-in-command Ayman al-Zawahri bestowed public approval for the idea this week in a video-taped message urging Muslims to back what he called “the gateway for the liberation of Palestine and the revival of the Islamic caliphate.”

Al Qaeda has said the state exists in Baghdad and several provinces including Anbar, where U.S. forces are struggling for control against an insurgent force of about 10,000 fighters.

The effort plays on Sunni fears of a resurgent Shi’ite majority in Iraq that minority Sunnis have come to identify with death squads and violent militias, officials said.

The promise of a Sunni Islamist state in the heart of the Middle East would likely draw new Arab recruits to al Qaeda from outside Iraq and deflect criticism from Arab Muslims who say the militant network has nothing to offer aside from violent resistance, according to analysts.

BIN LADEN’S VISION

It could also provide a prototype for the wider strategic vision of bin Laden and Zawahri, who periodically cast their struggle as a movement toward the creation of a new Islamist caliphate stretching across the Muslim world.

“We have a new agenda by a very powerful group. I believe we are facing a very, very smart and maturing adversary,” said Yasar Qatarneh, security analyst at the Jordan Institute of Diplomacy.

But a recent U.S. intelligence report said al Qaeda’s move appeared to be premature and was having trouble attracting Sunni support.

“Many of the groups are unhappy with what they’ve done and are not on board,” said an official who has seen the analysis.

Officials said secular Sunni nationalists distrust the group’s extreme religious views. Iraqi Islamists also fear they could lose their strategic focus on local objectives by joining al Qaeda, which is waging a global struggle against the West.

So far, the Islamic State in Iraq has attracted only what one knowledgeable former intelligence official described as “individuals and splinter groups.”

But Mustafa Alani, an Iraqi analyst at the Gulf Research Center in Dubai, said the disintegration of Iraq could give al Qaeda enough of a safe haven to install an actual state.

“(The Americans) are underestimating it,” Alani warned. “There is a logistical reality on the ground — they need a safe haven.”

Qatarneh said al Qaeda’s initiative also underscores the urgency of reaching a political accommodation with the main nationalist segment of the Sunni insurgency.

“If we do not co-opt and get into the process the Sunni Iraqis in general, al Qaeda is improving and will force itself as the main Sunni player in Iraq,” Qatarneh said.

U.S. intelligence believes the state declaration could be al Qaeda in Iraq’s response to a 2005 letter in which Zawahri called on the late militant leader Abu Musab al-Zarqawi to prepare an Islamist government to take over Iraq when American troops withdraw.

The letter was later denounced as a fabrication by al Qaeda.