"We tried to do our best [in Iraq], but I think there is much room for criticism, because, undoubtedly, there was arrogance and there was stupidity from the United States in Iraq," said Alberto Fernandez, director of public diplomacy in the bureau of Near Eastern affairs at the US state department, in an interview on the Arabic channel aired on Saturday.
Fernandez also declared that the US was ready to talk with any Iraqi group - except al-Qaeda in Iraq - to end the growing sectarian violence and the continued fighting.
"We are open to dialogue because we all know that, at the end of the day, the hell and the killings in Iraq are linked to an effective Iraqi national reconciliation," he said, speaking in Arabic from Washington.
"The Iraqi government is convinced of this," he said.
A US state department spokesman on Saturday said that Fernandez alleged he had not been quoted accurately in the interview.
Sean McCormack said: "What he [Fernandez] says is that it is not an accurate quote."
However, Aljazeera said Fernandez' interview had been rechecked and confirmed the comments were accurate and the words "arrogance" and "stupidity" were used.
Fernandez was interviewed after a spokesman for Saddam Hussein's outlawed Baath party, using the pseudonym Abu Mohammed, said that the US was seeking a face-saving exodus from Iraq and that fighters opposed to the US forces were ready to negotiate, but would not lay down their arms.
"The occupier has started to search for a face-saving way out. The resistance, with all its factions, is determined to continue fighting until the enemy is brought down to his knees and sits on the negotiating table or is dealt, with God's help, a humiliating defeat"
spokesman for Baath party
He also set a series of conditions which he said would have to be met before talks with the US could begin.
They included the return to service of Saddam Hussein's armed forces, the scrapping of every law adopted since Saddam Hussein was removed from power, the recognition of fighter groups as the sole representatives of the Iraqi people, and a timetable for the gradual and unconditional withdrawal of US and other foreign troops in Iraq.
"The occupier has started to search for a face-saving way out. The resistance, with all its factions, is determined to continue fighting until the enemy is brought down to his knees and sits on the negotiating table or is dealt, with God's help, a humiliating defeat," Abu Mohammed said.
"Removed from reality"
Fernandez responded to the comments saying: "There is an element of the farcical in that statement... They are very removed from reality."
The diplomat's remarks were part of a series of bleak assessments of the situation in Iraq from senior US officials in recent weeks.
"There is an element of the farcical in that statement... They are very removed from reality"
US state department official
President Bush has conceded that "right now it's tough" for US forces in Iraq.
Major general William Caldwell, the US military spokesman in Iraq, admitted that attacks in Baghdad were up 22 per cent in the first three weeks of Ramadan, despite a two-month US-Iraqi drive to bring the violence under control.