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(CNN) -- In a highly anticipated report being released Wednesday, the Iraq Study Group will call for a dramatic shift in war policy by urging the Bush administration to set a target of moving most U.S. troops out of their combat roles by early 2008.
The panel, which includes influential Democrats and Republicans, will stop short of setting a specific timetable for withdrawal, according to sources who have seen the executive summary of the report.
Observers say the report offers President George W. Bush the outlines of an exit strategy from the unpopular war, saying the primary mission of U.S. forces in Iraq should evolve into one of supporting the Iraqi Army.
However, while Bush has said he will listen to the group's recommendations, he has so far given little sign he will contemplate any quick exit from Iraq.
"It's in our interests to help liberty prevail in the Middle East, starting with Iraq. And that's why this business about graceful exit simply has no realism to it at all," Bush said after he met Prime Minister Nuri al-Maliki in Jordan last week. "We'll be in Iraq until the job is complete."
The White House said it doubted the panel would provide a "magic bullet."
Bush is under added political pressure to change course in Iraq since the November 7 elections, when voters ended Republican control of Congress.
Robert Gates, nominated to replace Donald Rumsfeld as defense secretary, said at his Senate confirmation hearing on Tuesday the United States was not winning in Iraq and dismissed the prospect of quick solutions.
"It's my impression that, frankly, there are no new ideas on Iraq," Gates said.
Michael Duffy, writing for TIME, says: "The commission is proposing nothing short of a repudiation of pretty much all U.S. foreign policy for the past three years."
Sources familiar with the report say it prods the administration to launch a new diplomatic initiative to solve the Israel-Palestinian conflict.
The report contends the United States "cannot achieve its goals in the Mideast" unless it embarks on a "renewed and sustained commitment to a comprehensive peace plan on all fronts," according to the sources who have seen the report.
As part of this initiative, the panel calls for direct talks between the United States and Iran, as well as Syria, a move the Bush administration has repeatedly resisted.
"Bush has never had to pull off a U-turn like the one he is contemplating now," Duffy says.
"To give up on his dream of turning Babylon into an oasis of freedom and democracy and instead begin a staged withdrawal from Iraq, rewrite the mission of the 150,000 U.S. troops there ... and launch diplomatic Olympics across the Middle East and between Israel and the Palestinians.
"So it may take the 43rd president a little more time than it normally does to execute this particular U-turn.
"And he will do all he can to make it look more like a lane change. But sometime in the next month or so, Bush will begin the biggest foreign policy course correction of his presidency."
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