The report, which the Post described as "strikingly negative," noted how Iraq has passed only three of 18 congressionally mandated benchmarks for political and military progress and how the number of attacks on Iraqi civilians hasn't changed.

The draft also said it was unclear whether the Iraqi government will spend $10 billion in reconstruction funds as promised, the newspaper said.

The person who gave the draft report to the Post said it was done out of concern its pessimistic conclusions would be watered down in the final version after editing at the Defense Department.

It is due to be presented to Congress on Tuesday.

The White House is also preparing its own status report in the second week of September, along with congressional testimony from U.S. Army Gen. David Petraeus, the top U.S. commander in Iraq, and U.S. Ambassador to Iraq Ryan Crocker.