According to a story in The Times, Bush and Rice "have finally noticed that [Iraq] is being partitioned by civil war" and are open to the notion of formal partition (under the guise of "federalization," mind you).
According to the article, venerable Bush-crony James Baker, co-chair of the Iraq Study Group (sounds like something that meets in the library after class, doesn't it?) has already met with the Syrians and the Iraniansâ€“and the Turks?â€“and that within the ISG "there is a growing consensus that America can neither pour more soldiers into Iraq nor suffer mounting casualties without any sign of progress.
For a clue what this refers to see today's Washington Post for an article on rising US casualties.
So anyway, the theory seems to be that if they snip the country into three, at least the Kurds and the Shia'a will be quiet long enough for the troops to be brought home.
Kind of turns that "cutting and running" phrase on its head.