"It's the perception of an American defeat in Iraq that will leave the whole of the Middle East in great turmoil and will be an enormous victory for terrorism," he added.
The Democratic-controlled US Congress passed legislation on Thursday to begin withdrawal of US troops from Iraq by October 1 with a goal of a complete pullout six months later.

The White House dismissed the legislation as "dead before arrival," with the president saying he will not hesitate to veto the bill.

Howard, a staunch ally of George Bush, sent 2,000 troops to support US and British forces in the Iraq invasion and has maintained 1,400 troops in and around that country, despite opposition lawmakers calling for an Australian withdrawal.