I was reminded of the story when reading Patrick Cockburn's The Occupation, a vivid account of war and resistance in Iraq which is published by Verso this week. Cockburn describes a visit to Dhuluaya, a fruit-growing region 50 miles north of Baghdad, where, early on in the occupation, the American military cut down ancient date palms and orange and lemon trees as part of a collective punishment for farmers who had failed to inform them about guerrilla attacks. This vandalism will be remembered for generations because it was senseless and to the Iraqi mind powerfully symbolises the malice of the occupiers.

'At times,' Cockburn says of the period just after the invasion, 'it seemed as if the American military was determined to provoke an uprising.' Well, now they've got it, a ferocious war that in the last three months alone has cost 10,000 lives, most of them Iraqi. There seems no end to it and as Cockburn writes in his conclusion, instead of asserting America's position as the sole superpower, the occupation has amply demonstrated the limits of US power.

The precise opposite of the desired effect was also achieved in the idiotically named 'War on Terror'. By the admission of intelligence services on both sides of the Atlantic, Iraq has galvanised terrorism. Sections of a US National Intelligence estimate that were declassified last week say the war has become the 'cause celebre for jihadist' and that 'jihadists regard Europe as an important venue for attacking Western interests'. This is not the view of a few CIA desk officers, but the shared verdict of 16 branches of US intelligence.

At the end of bad week in publicity terms, the White House has to deal with Bob Woodward's new book, State of Denial, which reveals that Bush ignored the mounting insurrection in Iraq and that the White House was riven with disputes over the war between the Cheney/Rumsfeld faction and the former Secretary of State, Colin Powell, and Andrew Card, a former chief of staff. Rumsfeld is depicted as arrogant and contemptuous of other members of the administration as well as being totally disengaged from the details of occupying and reconstructing Iraq, which was then the Pentagon's responsibility.

There is an alarming sense of drift in the policy-making on both sides of the Atlantic, an unreality and, to use Woodward's word, denial. A leaked document, believed to have been written by a British MI6 officer attached to the Ministry of Defence, pulls no punches: 'The war on Iraq,' it says, 'has acted as a recruiting sergeant for extremists across the Muslim world... Iraq has served to radicalise an already disillusioned youth and al-Qaeda has given them the will, intent, purpose and ideology to act.'

Any number of commentators and some politicians, for instance, Al Gore, Senator Robert Byrd in the US and Ken Clarke and Robin Cook in Britain, predicted precisely this outcome in the run-up to the war. Bush and Blair never heeded the advice.

Only a tenth of the US document was published, but it is enough to undermine the campaign by the administration over the last few weeks to portray Iraq as an essential part of the war on terror and of making Americans safe at home. It's a lie of monumental proportions which exceeds even Downing Street's manipulation of the September 2002 WMD dossier.

Iraq has done the opposite of making America safe and with five weeks to go to the mid-term congressional elections, the Democrats now have an opportunity to make that case. Bill Clinton has urged his party to go on the offensive about the war and on Bush's woeful negligence over the threat posed by bin Laden. He went on Fox TV last Sunday and made the case about bin Laden in a pugnacious interview with Chris Wallace, pointing out that it was his successor, not he, who had downgraded the al-Qaeda threat and demoted the counterterror expert who so feared bin Laden.

Confirmation of the Bush administration's lassitude comes in Woodward's book. In July of 2001, two months before the September attacks, he reveals that the head of the CIA, George Tenet, and his counterterrorism chief, J Cofer Black, met Condoleezza Rice, then National Security Adviser, to impress upon her the seriousness of the intelligence about an attack. Both men felt that she had not taken the warnings seriously.

Five years on, it is still terribly important to fight for the accurate record of what happened. For instance, last week Jack Straw appeared on Question Time and stated that Tony Blair did not know until 'late' of America's plans to attack Iraq. That is not true. It has been established that on 22 September 2001, 11 days after the al-Qaeda attacks, Blair attended a dinner with Bush, Colin Powell and Christopher Meyer during which the attack on Iraq was raised not just as matter of idle speculation. Is that late? No, Blair was on board from a very early stage.

Given the state of Iraq, the diaspora of terror cells, the scandals of torture and extra- judicial punishment in Guantanomo and Britain, it is remarkable that Blair is still Prime Minister, that no member of the war cabinet has apologised for this calamitous record and that the Labour party has not signalled its remorse in the slightest way. Last week's conference was devoted to a series of setpieces in which those responsible for the greatest foreign policy disaster since the Second World War were allowed to posture in front of a largely compliant audience.

I had the advantage of reading and not seeing Blair's speech, which meant that I wasn't exposed to his demonic charm and did not fall into the swoon that afflicted so many colleagues. I urge you to find the speech on the Labour party website and read exactly what he said and, while you're about it, look up John Reid's speech, too. Both their statements on liberty are enough to give you an idea of the profound threat they represent to British democracy, to the traditions of open and accountable government, to the previous requirement that politicians accept responsibility for failed policies.

Blair's speech dealt with terrorism in the following sentences. 'This terrorism isn't our fault. We didn't cause it. It's not the consequence of foreign policy. It's an attack on our way of life.' He might have said that on 12 September 2001 and he would have been right, but five years later, it is his and Bush's response to the threat - the invasion of Iraq - that has provided stimulus to the growth of terrorism and made the clash of civilisations a frightening possibility. Nowhere in his speech did he acknowledge this. How could he without interfering with the delicate business of moulding his legacy?

Apparently, he wasn't heckled and no one in the hall fell off their chair laughing when he said he would dedicate the rest of his time in office to advancing peace between Israel and Palestinians. That agenda was his reason for wiring British foreign policy into the White House. But he got nowhere with Israel at a time when Bush needed him, which leads one to suppose that he doesn't have a hope in hell now that he has served Bush's purpose.

The only satisfaction to take out of this terrible episode is that the true account of what happened before the invasion of Iraq and why is being assembled despite Bush and Blair's efforts to distort the record. What we do now is an altogether harder task. It will need a new generation of leaders to attempt to right the wrongs and set the West on a new course. But they will always have the memories of senseless destruction to contend with.

henry.porter@observer.co.uk