The United States should halve its military presence in Iraq within three years and completely pull out within five years, the latest US report on the war-scarred country said Sunday.

Only then will Iraq’s government, which has so far been a “disappointment,” take on its own security responsibilities to rebuild the nation, the report by the United States Institute of Peace said.

“The United States faces too many challenges around the world to continue its current level of effort in Iraq, or even the deployment that was in place before the surge,” the report said.

A sustainable military presence “is likely no more than half the current level within three years, with a view to removing all units within five years, when all US bases should be turned over to the Iraqi government,” it said.

“Only when the Iraqis and their neighbors perceive the real prospect of US withdrawal will they feel the need to take on greater responsibility.”

The institute’s report was released at the start of a week of drama in Washington as General David Petraeus and Baghdad ambassador Ryan Crocker, the top two Americans in Iraq, prepare to testify in Congress Monday and Tuesday.

They face a hostile barrage from Democrats over if and when troops can come home from a four-year war that has killed more than 3,700 US soldiers, tens of thousands of Iraqis and cost half a trillion dollars.

Petraeus will argue that the contentious strategy announced by President George W. Bush in January of surging 28,500 extra troops into Iraq has slashed sectarian violence and should be extended.

But he also is expected to accept gradual cuts in the 168,000 strong US garrison in Iraq, beginning early next year — although that is unlikely to satisfy anti-war Democrats.

The new recommendations were issued at the institute’s behest by several experts who sat on the Iraq Study Group, a high-profile bipartisan commission that last December appealed for a new course in the war-torn nation.

The study group called for diplomatic overtures to Iran and Syria in a bid to stabilize Iraq, a series of benchmarks to judge progress by Iraqi authorities, and a US shift away from combat and to training Iraqi forces.

Those recommendations were largely reprised by the Institute of Peace, which ran the Iraq Study Group, and which works to prevent international conflict and promote post-conflict development.

The Bush administration should focus on five key objectives as it charts its next steps in Iraq, the institute’s report said. Those were:

— Prevent Iraq from becoming a safe haven for international terrorists;

— Restore US credibility, prestige and capacity to act worldwide;

— Improve regional stability;

— Limit and redirect Iranian influence;

— Maintain Iraq as a single, independent state.

“The time has come to chart a clearer path forward, taking into account the regional and global contexts,” the report said.

“Americans want an approach that protects US vital interests and can therefore be supported across a wide range of the political spectrum.”