By David Clarke LONDON, Dec 8 (Reuters) - The report by an elite U.S. panel on Iraq is flawed because it assumes that there is a common interest among states in the Middle East to stop a slide into chaos in Iraq, a senior U.N. envoy said on Friday. Terje Roed-Larsen, U.N. Secretary-General Kofi Annan's special envoy on Syria-Lebanon issues, said some regional states had an interest in maintaining a "calibrated or designed disequilibrium" in Iraq to inflict pain on Washington. "They want to keep it in disequilibrium, which does not lead to collapse, because that will bog down the Americans, their forces, so they cannot focus on other issues in the region and it will weaken the administration in Washington," he said. "So I do not believe necessarily that the basic assumptions in the report are correct, that there is a common interest -- on the contrary," Roed-Larsen told the Chatham House think-tank. The Iraq Study Group, led by former U.S. Secretary of State James Baker, has proposed that the United States abandon its policy of shunning Syria and Iran, accused of fomenting violence in Iraq, to prevent a slide towards anarchy. The 10-member panel said an international support group should be set up to hold regional talks focusing on Iraq, and leave concerns about Iran developing nuclear weapons to the United Nations Security Council. However Roed-Larsen said there was a perception in Middle East capitals that Iran would pursue its nuclear programme, despite threats of sanctions, and that ultimately there would be a confrontation. "This is a very strong perception and ... it's perceptions which drive actions not realities," he said. "If this continues the NPT (non-proliferation treaty) will collapse ... we will have the nuclear arms race in the region and I predict we will have a global arms race as a consequence." DARK TIMES AHEAD Larsen said the Middle East crisis was essentially four epicentres -- Iran, Iraq, Lebanon-Syria and the Palestinian-Israeli conflict, and that they were becoming increasingly entwined. "Maybe the only arena where there is a possible win-win situation is the Palestinian-Israeli conflict," he said. Roed-Larsen was a U.N. Middle East envoy involved in talks that led to the 1993 Oslo accords that set up the Palestinian Authority. He said if progress were made on the Palestinian issue, it might make it easier to defuse the other flashpoints. However, he said the only way to jump-start the peace process there was for moderate Palestinian President Mahmoud Abbas to begin discreet negotiations with Israel to map out a framework with timelines to achieve the two-state solution. "The other conflicts, they have the structure of a win-lose situation where the two parties want to defeat the others," he said. "That's why I remain pessimistic on the other issues because here the parties are seeking confrontation. Look at Lebanon, today, literally." "I believe we are heading toward very dark times and I think it's pretty unstoppable, but there are certain ways out," he said. "But I think time is running out because what is today extremely difficult might be impossible tomorrow."
