May 24, 2007  -- ABC News has learned new details about what the intelligence community was telling the White House before the Iraq War about the challenges that would face the United States after the fall of Saddam Hussein.

In stark contrast to the WMD fiasco, the intelligence community was largely on target about what the United States would face in postwar Iraq.

But it's not a slam dunk. In some ways, the situation in Iraq is actually worse than the intelligence community predicted.

In January 2003, the CIA's National Intelligence Council delivered to the White House two reports predicting what the United States would face in Iraq. The reports, which until now were classified, are expected to be released by the Senate Intelligence Friday.

Officials with access to the reports read excerpts to ABC News.

The first report is titled "Principal Challenges in Post-Saddam Iraq." It paints a picture of an Iraq beset by ethnic violence and unlikely to accept democracy. Here are some highlights:

Iraq is unlikely to break apart, but it is "a deeply divided society." There is "a significant chance" that groups would "engage in violent conflict ... unless there is an occupying force to prevent them from doing so."

Neighboring states could "jockey for position ... fomenting ethnic strife inside Iraq."

"Iraq's political culture does not foster political liberalism or democracy."

"A generation of Iraqis" who have been subjected to Saddam's repression are "distrustful of surrendering or sharing power."

Al Qaeda could operate from the countryside unless there is a strong central power in Baghdad.

There would be "a heightened terrorist threat" that "after an initial spike would decline after three to five years."

The second report is titled "Regional Consequences of Regime Change in Iraq." This report warns of potential instability in the region, especially if the war were to be long and violent. It also warns that al Qaeda could exploit U.S. focus on Iraq by re-establishing its presence in Afghanistan.

This report, however, also outlines the potential regional benefits of success in Iraq. For example, it says success in Iraq "would increase the willingness of regional governments to cooperate with the U.S."