The muted message from Crawford, Texas said everything that needed to be said about the execution of Saddam Hussein. Gone was the triumphalism of "mission accomplished" that President George W Bush had trumpeted four years ago from an aircraft carrier off the coast of California, when it seemed that the problem of Iraq and its unruly leader had been fixed. Instead, the only comment from the presidential ranch was that the news from Baghdad was "an important milestone" following "a difficult year for the Iraqi people and our troops". From mission accomplished to important milestone, the US policy has come a long way and, as events have proved, all of it has been downhill.

Bush had been asleep when the Iraqi leader was put to death and he woke the following day to find that nothing had changed and that perhaps nothing was changeable. This week, he will try once more to prove that there is a way ahead when he announces drastic changes to the US policy in Iraq, which will include the deployment of up to 30,000 troops (optimistically described by the Pentagon as a "surge"), changes in the command structure and the injection of additional funds for reconstruction. It will not be a short-term fix either, as everything points to any new plan being effective over at least 18 months, which will take Bush towards the end of his presidency.

Sources close to the White House describe the policies as a "big bang" for Iraq that will finally end the insurgency war by force of arms and by strengthening the administration run by prime minister Nuri al-Maliki, but already the new strategy is looking as flawed as anything that preceded it.

The proposed changes come at a tense time for the US position in Iraq. Saddam's hideous execution has heightened tensions between the Sunni and Shia communities and until there is a strong and respected central administration, civil strife is almost certain to escalate. So far, the bloodshed has been nothing out of the ordinary and has merely been a continuation of earlier violence, but the signs from within Iraq are not encouraging. While the rest of the world and the people of Iraq attempted to make sense of an execution that actually elevated the standing of a ruthless dictator, al-Maliki appeared to abnegate responsibility for what was happening by telling the influential Wall Street Journal that not only did he not want the prime minister's job in the first place, but he would certainly not be looking for a second term in office.

This was hardly a ringing endorsement for the emergence of a democratic and stable administration in Iraq, but that was not the only shock Bush had to face. Back home in Washington, there was an even starker reminder of the difficulties facing the White House when Nancy Pelosi, the new Speaker of the House of Representatives, was sworn in. She immediately reminded her audience that the American people had "rejected an open-ended obligation to a war without end" and insisted that "it is the responsibility of the president to articulate a new plan for Iraq that makes it clear to the Iraqis that they must defend their own streets and their own security, a plan that promotes stability in the region and a plan that allows us responsibly to re-deploy our troops".

Pelosi's insistence on a new deal reflects a growing belief among the Democrats that the US should rethink its position in Iraq and that it should make a start by scaling down its forces in the country. That was part of the party's election message before the mid-term house elections and already the Democrat-controlled Congress has announced it will institute a "100 hours" assault course to push through a programme of reform before the president's State of the Union address on January 23, and that the question of US policy in Iraq will be part of the process.

"We are talking about the lives of American soldiers, whether we will send 20,000 or 30,000 more American soldiers into that field of combat, whether that can possibly make a difference," claims Dick Durbin, Democrat senator for Illinois. "I hope to God that the president reconsiders that. I am afraid that in many instances we are only sending targets, not troops."

On Friday, the Democrats cranked up the pressure with a letter to Bush, signed by Pelosi and the Senate majority leader Harry Reid, in which they claimed that sending more troops to Iraq would only delay the day when the Iraqis were able to take control of their own affairs. For that reason, they announced they would not support any move to increase the size of the US garrison.

PElosi and Reid wrote in their letter: "Adding more combat troops will only endanger more Americans and stretch our military to the breaking point for no strategic gain. And it would undermine our efforts to get the Iraqis to take responsibility for their own future. We are well past the point of more troops for Iraq."

It sounds good and there is no denying the strength of feeling within the party about the blunders that have been made in Iraq, but imposing radical changes will be more or less impossible. Bush might be a lame-duck president whose best years are behind him, but he remains the commander-in-chief and Congress would never attempt to counter-mand any strategic decision made by him on the advice of the Joint Chiefs of Staff. Only two options are available to the Democrats and both are improbable. The first would involve the impeachment of the president for taking the country into an illegal conflict and waging the war on the false premise that Saddam possessed weapons of mass destruction; the second would require the Democrats to deny additional funds for the president's military plans.

Pelosi has already admitted impeachment is off the agenda and she knows only too well that no US politician could hope to survive if they starved the military of funds. The best they can hope for is to influence the president to scale down his plans. One other problem intrudes: although the Democrats want to check Bush's policy in Iraq and have voiced their disapproval of what has happened since 2003, like everyone else they have failed to come up with a viable alternative. That absence leaves the field open to the president and early this week he will unveil ambitious new plans to turn things around and finally claim victory in what his advisers have dubbed "the battle of Baghdad".

There will be three main pillars to the new proposals. The first will see the deployment of up to 20,000 extra troops, and the Army and the Marine Corps has been given strict orders to find the necessary numbers. If senior commanders fail, they have been told that heads will roll and there must be no talk of shortfalls or depleted numbers. If necessary, tours of duty will be extended from 12 to 15 months and garrisons elsewhere will have to be reduced. There will also be more money for reconstruction and aid projects and attempts will be made to shore up al-Maliki's rickety administration by giving it a new backbone in the shape of additional US consultants and advisers. And, as happens in any shake-up of this kind, there will be some serious blood-letting amongst the personnel whose reputations have been discredited by their handling of US policy to date.

General John Abizaid will be replaced as head of central command for Iraq and Afghanistan by admiral William Fallon. Abizaid has consistently warned that while it is possible to deploy additional troops in Iraq they will only produce "a temporary effect", and for his pains he has been written off as a Vietnam has-been who is more worried about casualties than military effectiveness. Criticised for the same reason, general George Casey, the US commander in Iraq who has been responsible for attempting to make the Iraqis more responsible for their own security, will make way for the more bullish lieutenant-general David Petraeus, a veteran soldier and former commander of the 101st "Screaming Eagles" Division.

Also shipping out of Baghdad in the near future will be the outspoken US ambassador Zalmay Khalizad, a likeable diplomat of Afghan descent, who is being recalled to the US to replace the controversial John Bolton at the UN. Khalizad will in turn be replaced by Ryan Crocker, currently the US ambassador to Pakistan. At the same time, intelligence guru John Negroponte will beef up the State Department by becoming Condoleezza Rice's deputy. All these changes get rid of the people associated with the failure of US policy in Iraq and open the door for a more aggressive and intensive approach to a solution.

Much of the president's thinking on this subject has been formed by the military historian Frederick Kagan, author of Choosing Victory In Iraq, who also acts as a consultant at the right-wing American Enterprise Institute. Together with retired general Jack Keane, a former vice-chief of staff, he has produced a blueprint which Bush seems to have accepted and which calls for an end to the discredited "light footprint" advocated by former defence secretary Donald Rumsfeld, who was sacked at the end of last year. In its place there will be something heavier and more substantial - a "surge" of additional forces and resources to tackle the problem once and for all. Instead of drawing down troop numbers, as advocated by the Democrats and supported by large numbers of Americans, Bush will do the exact opposite and announce the deployment of additional numbers of troops.

Some of them will be used to strengthen the borders with Iran to prevent the cross-border infiltration by Shia militias, but the bulk of the reinforcements will be used to tackle the insurgency war in Baghdad. How this will be done is open to question.

Planners in the Pentagon are being unusually coy about the precise tasks that will be allotted to the new formations and comment has been restricted to the vague promise by general Peter Schoomaker, chief of staff, that "we would not surge without a purpose and that purpose should be measurable".

That means that no hints have been given about the approach to be taken with the Mehdi Army owing its allegiance to the radical Shia cleric Moqtada al-Sadr, who has been vociferous in his condemnation of the US occupation. His followers have spawned most of the sectarian violence in Iraq and during Saddam's execution there was a chilling reminder of his strength and influence when his name was chanted again as the noose was placed around the Iraqi dictator's neck. Up until now the accepted wisdom has been to live with al-Sadr, but the time may have arrived when the Mehdi Army has to be confronted or disarmed, even if the process produces unacceptable casualties.

As Pentagon staffers always concede, that harsh reality is the price to be paid for any reinforcement - "more troops," they say, "mean more body bags". However, in any counter-insurgency, troops on the ground are always at a premium and for some time now US commanders in Iraq have been crying out for greater numbers to be put at their disposal. Last year they saw a similar plan, Operation Forward Together, fail ignominiously because the 8000 additional troops made available to them were too few to make any difference.

Kagan, in particular, has been scathing about this timid approach and has warned consistently that the "Iraq-lite" philosophy adopted by Rumsfeld has been useless right from the start.

"When the president makes his announcement he will be putting the cap on a debate that has been vexing the best minds at the state department and the Pentagon," says a senior US diplomatic source. "On the one hand the joint chiefs of staff and general Casey in Iraq have spent the past two years leaning towards troop reductions and the Iraqification of security forces. On the other, there has been a resurgence of more hawkish thinking which believes that the battle can be won and that it would be a policy of despair to cut and run."

If the leaks are right, and the US plumps for "surging troops" and "surging resources", this will be the antithesis of what James Baker's Iraq Study Group recommended at the end of last year. At the time, the former secretary of state made it clear that his findings represented joined-up thinking and should not be cherry-picked by the president.

Although Bush has great respect for Baker and acknowledges the depth of his experience in the Middle East, he has clearly paid lip-service to the findings of the group and has listened instead to advisers like Kagan and Keane. With their siren voices ringing in his ears, Bush has come to believe that 2007 will be a crucial year in Iraq and one on which history will finally assess his presidency.