With both Iraq and Bush's neocon strategy in tatters, Blair seems to have finally seen the light and realized that the only way to improve the situation is to get the focus back on Israeli/Palestinian negotiations:
Blair, was preparing a delicate but critical shift in his Iraq policy... to argue that "as the conflict has evolved, our strategy must evolve with it".
He will... insist, in words directed at the Bush administration, that no peace is likely across the Middle East without a solution to the Palestine-Israel crisis.

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