'Crack in the Dike': White House in 'Panic Mode' Over GOP Revolt on Iraq White House panics in trying to appease Democrats and Republicans on Iraq.

July 9, 2007  -- ABC News has been told the White House is in "panic mode" over the recent defections of Republican senators on the president's stay-the-course policy in Iraq.

Senior Bush administration officials are deep in discussion about how to find a compromise that will "appease Democrats and keep wobbly Republicans onboard," a senior White House official told ABC News.

The official said the White House "is in panic mode," despite Monday's on-the-record briefing by White House Press Secretary Tony Snow, who played down any concern over the recent spate of GOP senators who have spoken out publicly in support of changing course in Iraq.

The Republican defections are seen as "a crack in the dike," according to the senior White House official, and National Security Adviser Steven Hadley is most concerned.

Bush administration officials are currently discussing options about how to get out of "this conundrum with the Republicans," while giving Gen. David Petraeus, commander of U.S. forces in Iraq, time to implement the troop surge strategy in Iraq, according to a senior White House official.

"We're not retreating or announcing troop withdrawal," the official said, but, "we need to buy more time for Petraeus." The White House has not reached any kind of consensus about what to do, despite the high-level discussions.

The White House suggests a much-anticipated report on the progress of the president's policy in Iraq will likely be released Thursday, and that is the day Bush will likely comment on it.

A senior White House official told ABC News the report will be "mixed." The White House does believe there has been progress on the security front in Iraq, but the political progress is obviously very bad.

One official familiar with the report said there are some bizarre categories under benchmark that say "satisfactory, nonsatisfactory and unsatisfactory".

Despite the report's mixed conclusions about the president's policy, senior White House officials told ABC News not to expect Bush to announce any kind of changes or new strategy.

Meanwhile, Defense Secretary Robert Gates has pressed for a pullback that would reduce the combat brigades in Baghdad by early next year.

Under his plan, those combat units that remain in Iraq would take up a more limited mission of training Iraqis, watching the borders and going after al Qaeda. Gates believes that if the troop surge in Iraq was extended, it would further stretch the Army. He is adamant about not extending troops again.

One White House official told ABC News he expects Petraeus will be able to show that "momentum" is shifting in the favor of the United States by September of this year, allowing Bush to say that it is his hope that a drawdown could begin in the spring, if that momentum continues.

However, the official expects the president would make clear that this drawdown would be based on certain conditions being met, and that if the momentum was lost in the spring, then there would be no drawdown.

The official also said former Iraq commanders Gen. George Casey and Gen. John Abizaid had hoped this type of drawdown would be possible in 2006, but didn't happen because conditions on the ground changed for the worse.

So far, however, the White House has made no decision about changing the strategy.