Before our eyes, the neoconservative position is disintegrating. Its foreign-policy tenets have been shown to be false. As is now openly admitted, they have brought the US to the verge of disaster in Iraq, which is why the American version of the "men in grey suits" has ridden to the rescue. After less than six years in office, elected at a time when the US was unchallenged as the sole superpower, the Bush administration has managed to deliver the country to the edge of what can only be compared to a Vietnam moment: the political and military defeat of the central and defining plank of American foreign policy.

Of course, in one sense it is quite unlike Vietnam. In 1975 the Americans suffered a spectacular military defeat at the hands of North Vietnam and the Vietcong, with US helicopters seeking to rescue leading US personnel from the tops of buildings as Vietnamese guerrillas closed in on the centre of Saigon. It was to shape American foreign policy - in particular, a desire to avoid overseas military entanglements - for decades. Indeed, the rise of the neoconservatives was partly predicated on a rejection of what they saw as American defeatism during and after the Vietnam war. Iraq is very different. There is no single enemy with a clear military strategy. Baghdad will not be Saigon. This is a case of an endless, bloody and unwinnable quagmire rather than any spectacular denouement in waiting.

But the Iraq moment is far more dangerous for the US than the Vietnam moment. Although one of the key justifications for the Vietnam war was to prevent the spread of communism, the US defeat was to produce nothing of the kind: apart from the fact that Cambodia and Laos became embroiled, the effects were essentially confined to Vietnam. There were no wider political repercussions in east Asia: ironically, it was China that was to invade North Vietnam in 1979 (and deservedly got a bloody nose).

The regional consequences of the Iraq imbroglio are, in comparison, immediate, profound and far-reaching. The civil war threatens to unhinge more or less the entire Middle East. The neoconservative strategy - to remake the region single-handedly (with the support of Israel, of course) - has been undermined by its own hubris. The American dilemma is patent in some of the key recommendations of the ISG report: to involve Iran and Syria in any Iraqi settlement (including the return of the Golan Heights to Syria) and to seek a new agreement between Israel and Palestine. In short, it proposes a reversal of the key strands of Bush's foreign policy

From a longer-term perspective, moreover, it is already clear that it will be impossible for the Americans to restore the status quo ante in the region. The failure of the occupation has shown the limitations of its power - which every country, from Iran and Syria to Israel and Saudi Arabia (not to mention Hizbullah and Hamas), will have noted. The US has been the decisive arbiter in the Middle East since the end of the Suez crisis in 1956, albeit with the Soviet Union playing a secondary role until 1989. The American era is now over.

In future the US will be forced to share its influence with regional powers such as Iran, with the EU - and no doubt in time, with emerging global players such as China and perhaps even Russia. Such a scenario may well mean that the key alliance that has shaped the Middle East since 1956 - between the US and Israel - will no longer be so pivotal and could be increasingly downgraded. From a regional standpoint, it is clear that the Iraq moment is far more serious for the US than the Vietnam moment.

What is true regionally is also the case globally. We are reminded of how even the most powerful and, indeed, the most knowledgeable can get things profoundly wrong. It is worthwhile recalling the longer-term global context of the American defeat in Vietnam. It did not signal any serious upturn in the fortunes of the Soviet Union; this was already in a state of economic stagnation and growing political paralysis that was to become terminal in the 80s, leaving the US as the sole superpower. It was this that encouraged the neoconservatives to utterly misread the historical runes at the end of the 90s. They believed that the world was ripe for a huge expansion of American power and influence.

A few years later we can see the full absurdity of this position. Far from the US being in the ascendant, deeper trends have moved in the opposite direction. The US might enjoy overwhelming military advantage, but its relative economic power, which in the long run is almost invariably decisive, is in decline. The interregnum after the cold war, far from being the prelude to a new American age, was bearing the signs of what is now very visible: the emergence of a multipolar world. By misreading global trends, the Bush administration's embrace of unilateralism not only provoked the Iraq disaster but also hastened American decline.

An increasingly multipolar world requires an entirely different kind of US foreign policy: far from being unilateralist, it necessitates a complex form of power-sharing on both a global and regional basis. This is not only the opposite to neoconservative unilateralism, it is also entirely different from the simplicities of superpower cooperation and rivalry in the bipolar world of the cold war. The new approach is implicit in the ISG report, which recognises that any resolution of the Iraq crisis depends on the involvement of Iran and Syria. Elements of this approach are already apparent on the Korean peninsula and in Latin America. The ramifications of the Iraq moment will surely influence US foreign policy for decades to come.

· Martin Jacques is a visiting research fellow at the Asia Research Centre, London School of Economics

Martinjacques1@aol.com