"Yes, it's getting worse," Powell told ABC Television on Sunday.
"And the reason it's getting worse is that they are determined to disrupt the election. They do not want the Iraqi people to vote for their own leaders in free, democratic elections."
Powell added: "Right now our goal is - and I think it's an achievable goal - is to have full, free and fair elections across the whole country."
The top US military commander in the region, General John Abizaid, also warned that "we will fight our way through elections" in Iraq, but said he could not predict whether the entire country would be able to vote.
Their remarks stood in sharp contrast to the optimistic scenario painted by US President George Bush and interim Iraqi Prime Minister Iyad Allawi, who vowed last week that elections would go ahead and insisted "we are succeeding in Iraq".
Allawi (L) said his government
Powell told CNN television's Late Edition: "There will be polling stations that are shot at. There will be insurgents who will still be out there who will try to keep people from voting.
"I think what we have to keep shooting for, and what is achievable, is to give everybody the opportunity to vote in the upcoming election, to make the election fully credible, and something that will stand the test of the international community's examination."
His remarks came after Defence Secretary Donald Rumsfeld on Thursday told a congressional committee "so be it" if unrest prevents elections from being held in parts of Iraq.
"You have an election that's not quite perfect. Is it better than not having an election? You bet," he told the Senate Armed Services Committee.
Full, free and fair
But Powell said on Sunday: "It has to be seen as a comprehensive, full, free and fair election in order to get the kind of credibility that we want it to have.
The rising army casualty count is
a major US election-year concern
Credibility may be in the balance for the US, as the notion of partial elections has already raised the ire of regional analysts.
"What elections under occupation?" asked Mustafa Bakri, editor of the weekly Egyptian news magazine al-Osboa.
"Iraq is not free nor is it stable. There is nationwide chaos. Its infrastructure has been destroyed and its wealth pillaged and plundered by the US occupation," he told Aljazeera.net.
Bakri said elections had to be all-inclusive and not leave out any sector of Iraq society.
In an editorial, The New York Times said the mounting insurgency left Washington and Allawi in a Catch-22: "The only hope of quelling the insurgency depends on progress towards democratic government and the only hope of meaningful elections depends on greater progress in quelling the insurgency.
Powell says a conference with
Iraq's neighbours is planned
"With the original rationales for the Iraq war now discredited and with a spreading insurgency killing scores of American soldiers and hundreds of Iraqi civilians every month, the prospect of holding democratically legitimate elections in January is about the only thing the Bush administration could hope for as a sign of eventual success," the newspaper said.
On Sunday, an international security analyst said Iraq had become the "most hostile environment" on earth.
Paul Beat, director of International Asset Protection at London-based Control Risks Group, said the violence of recent weeks, with armed groups seizing foreigners from the heart of Baghdad and staging a spate of bombings, marked a new stage in the conflict.
Powell has said an international conference on Iraq is likely in late October or early November in a city in the region, possibly Amman or Cairo, to build support for the country.
Participants could include Iraq's neighbours as well as several industrialised nations, he said.
"It will be a conference in the region ... so that all of Iraq's neighbours can sit with Prime Minister Allawi and his cabinet and discuss why it is in the interest of the whole neighbourhood for there to be a stable Iraq with an elected government, resting on the basis of a democratic system that is no threat to any of its neighbours," Powell said.