Nothing has exposed the delusionary disaster of the war on terror like the past week's eruption of its mutant progeny across Iraq. David Cameron declared today that the Islamic State of Iraq and Greater Syria, rejected as too extreme and sectarian by al-Qaida itself, is now the most serious threat to Britain's security.

As Isis forces were reported to have seized Iraq's largest oil refinery at Baiji, Barack Obama was said to be considering demands from both Baghdad and Washington hawks for air attacks to halt the sweeping advance of the jihadist-led rebellion. Hundreds of US troops have already been dispatched to prepare the ground and defend the 5,500-strong American embassy.

Eleven years after the US and Britain launched their onslaught on Iraq as the centrepiece of the terror war, they are once again considering a return to the scene of their strategic humbling, as its gruesome consequences are played out across an already devastated country.

Isis are in reality the shock troops of a wider Sunni Arab revolt – backed by ex-Ba'athists and other former resistance groups – against the Shia-led government of Nouri al-Maliki. Such are the contortions of western policy that, while the US and fellow travellers are effectively allied with Isis and other Sunni Islamist rebels fighting the Assad regime, in Iraq they stand with the Shia Islamist Maliki battling the same groups.

It was his US-trained forces that melted away when Isis took Iraq's second city, Mosul, last week. The collapse was smoothed by sympathetic or corrupt commanders, as well as tacit deals with Kurdish forces who used the chance to take control of the contested city of Kirkuk and the northern oilfields.

Now Isis is coming up against more serious resistance on the way to Baghdad. The sectarian takfiri group was originally the al-Qaida franchise holder under the US-British occupation, but was rejected by the bulk of the resistance. It then moved into Syria to join the anti-Assad uprising, with tacit backing from Gulf states such as Saudi Arabia.

Since last summer it has controlled a swath of Syrian territory near the Iraqi border, amassing wealth and foreign recruits. But it was the Maliki regime's brutal suppression of a Sunni protest movement last year – culminating in the massacre of dozens of demonstrators in Hawija – that gave Isis a new opening in Iraq. By January it had taken over Falluja, scene of some of the worst US occupation atrocities, and unleashed carnage on Shia communities across the country.

The idea that this horror story can be disconnected from the US-led military occupation of Iraq that preceded it, as the war's apologists still try to maintain, is an absurdity. It's not just that there was no al-Qaida or Isis in the country before the invasion, or that the occupiers deliberately dismantled the Iraqi state and army and destroyed the country's infrastructure in the process. It's that colonial divide-and-rule sectarianism was deliberately fostered from the first day of the occupation.

Not only was a religious and ethnic carve-up enforced across public life, but US commanders were directly involved in sponsoring an El Salvador-style dirty war of sectarian death squads to undermine the armed resistance.

Maliki was himself selected by the US as a suitable strongman to protect its interests. That's not to suggest that any transition from Saddam's dictatorship wouldn't have been painful, or that Iraqis have had no agency in what took place. But much of the western debate of the past week has glossed over the scale of the human and social catastrophe unleashed by the US-led war. The most recent US academic estimate of the death toll is at least half a million, while Iraq Body Count has recorded a minimum of 190,100 violent deaths as a result of the invasion – 4 million became refugees.

That wasn't a "tragic error", as some claim, or a problem of post-invasion planning. It was a barbarous crime whose predicted consequences Iraqis are living with today. The idea that Tony Blair – who helped launch the war on a false pretext and now says we need to "liberate ourselves from the notion that 'we' have caused this" – remains Middle East peace envoy is beyond parody.

The apologists say US troops left too soon, that Iraq is now a democracy, and that Syria shows non-intervention can carry its own costs. But post-occupation Iraq is an institutionalised kleptocracy, a US-Iranian condominium where voting is by enforced sectarian and ethnic blocs, torture is rampant, and thousands are imprisoned without trial.

If such democracy is the yardstick, it was the Iraqi government that demanded the withdrawal of foreign troops. As for Syria, the US and its allies are bleeding it by funding and arming rebel forces, while withholding the means for a decisive breakthrough. Without doubt, direct western military intervention would escalate the death toll to Iraqi proportions.

The arguments about how Iraq reached today's breakdown matter precisely because the backlash from the last intervention risks being used to justify yet another – and not just in Iraq. Since its launch in 2001, the war on terror has spread and spawned support for jihadist terror groups across the Muslim world, from al-Qaida to the Pakistani Taliban. The pattern of blowback couldn't be clearer. US bombing or drone attacks on Isis in Iraq, embedded in urban areas, won't break its grip on cities such as Mosul or Tikrit. But it will certainly kill large numbers of civilians and inflame the country, and the region, still further.

A narrow, violent takfiri group such as Isis is unlikely to be able to hold large urban centres for long – experience suggests its Sunni allies will turn against it – let alone continue its advance into Baghdad or Shia heartlands. But its dramatic successes have certainly put the survival of Iraq itself at stake. Like Syria, the country is already effectively partitioned – and Islamist groups are very far from being alone in rejecting the artificial "Sykes-Picot" borders imposed by Britain and France on the Arab world at the end of the first world war.

Only a determined break by a major Iraqi political force with the sectarian and ethnic politics bequeathed by Bush and Blair could now halt the fragmentation. The entire Arab world is living with the fallout from a century of attempts to control their region and resources. More intervention will only deepen the crisis. Only Iraqis can shape their future.

Twitter: @SeumasMilne